Online gambling is on the rise, particularly the use of sports betting apps. An alarming aspect of this trend is that many users are placing bets using a credit card.
Gambling on credit
In December 2020, the Australian Banking Association (ABA) issued a consultation report on people’s attitudes to gambling using credit. On the whole, most respondents were opposed to the use of credit for gambling, although regular gamblers were less likely to be in favour of banning the practice.
The use of credit cards and cash advances on credit cards has been banned at casinos, racetracks and gambling areas of licensed venues since the early 2000s but there are currently no restrictions on the use of credit cards for online gambling, which includes betting and lottery apps.
Online gambling allows you to gamble anytime, from anywhere, and because it’s cashless it can be harder to appreciate how much money you are losing. Being able to use a credit card to place bets also makes it easier to accumulate larger amounts of debt over a shorter period of time.
Paying interest on your losses
To put online gambling in perspective, would you take out a personal loan for gambling purposes? By using a credit card to place a bet, that’s exactly what you are doing, borrowing money to gamble.
Gambling products are treated as cash advances by banks, often incurring higher fees and much higher interest rates. Anything treated as a cash advance will not benefit from any interest-free period, which means you will start paying interest from the day you place your bet. So in reality, placing a bet with a credit card means the cost of that bet will be increasing daily until you pay your credit card balance in full.
Who is more likely to use an online betting app?
People of all ages, from all socio-economic backgrounds use apps to buy lottery tickets and place bets on things like horse races, football games, and any number of events. However, it is more common among younger age groups, particularly those under 30. Regular gamblers are more likely to be men, and the use of credit cards to gamble is fairly common.
Unfortunately, regular use of betting apps can lead to impulsive gambling behaviours down the track.
What’s the alternative?
If you are going to use betting apps, use a debit card. At least then you’ll see the money coming out of your bank account, which may make it easier to keep your gambling under control. Be aware that these apps are designed to take your money, to profit from your losses.
If you‘d like information, advice and confidential assistance for anyone effected by gambling, go to gamblinghelponline.org.au. If ever you need guidance or assistance with working through severe financial problems, go to Contact Us. We’ll be more than happy to discuss your problems on a confidential basis and if required, we’ll refer you to a trusted professional in our network who can help.
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