Commenting on Labour Deputy Leader Tom Watson’s call for a ban on using credit cards to gamble, Alastair Douglas, CEO of Free Credit Report provider and credit experts TotallyMoney, said:
“A blanket ban on the use of credit cards would be a massive win for consumers.
“For regular purchases, people usually get an interest-free grace period, which doesn’t apply when credit is used to gamble. The trouble is that most people aren’t aware of how much gambling with credit truly costs them — that is, not until their bill arrives. A TotallyMoney survey of 1,000 people revealed that only 1 in 10 people are aware that gambling with credit is treated as a cash advance, which means higher-than-average interest rates apply.
“What’s more, a recent report by the Gambling Commission says up to £8.6 billion of gambling deposits are made using credit cards. Assuming an average cash transaction fee of 3.23% and an average cash advance interest rate of 28.13%, we calculated that consumers stand to save £545 million each year on fees and interest.
“That’s why TotallyMoney is more than happy to welcome a blanket ban on gambling with credit — not only because it would save people a lot of money, but also because it would solve the problem of people spending more than they can afford by gambling with credit.”