Online casinos work on the principle of online transactions. To play online games, they need to make all the deposits and then can collect their winnings after making withdrawals to their casino account. To facilitate deposits and withdrawals, NonStopCasino’s online operators offer players a variety of payment methods, including credit cards.
This is the reason why players from all over the world can make payments to online gaming platforms. Some of the most common payment methods are debit cards, bank transfers, e-wallets and cryptocurrencies. However, the credit card is one of the least popular ways to pay at online casinos.
Most banks do not allow gambling with credit cards for many reasons. The reasons range from legal problems to credit card fraud. However, a number of banks allow credit card transactions because they make the best use of the credit that players enjoy. In this article, we will look at why some banks specify credit cards as a means of payment and how this same means of payment can be profitable for the bank itself.
What are the hidden fees for credit card transactions at online casinos?
Credit cards that allow casino transactions often classify gambling loans as cash advances. Cash advances are about the same as cash withdrawals, except that there are high fees involved. The cost of the cash advance is between 3 and 5%. At the same time, however, there is also a fairly high APR. In addition, credit card transactions are often accompanied by a grace period for the loan. In the case of gambling, there is no grace period and interest is calculated from the next day.
Hidden costs in an ordinary transaction include the following hidden costs:
- Service Fees
- money up front
- Overlimit fees
- Late payments
- International Trade
- GST fees
Does the bank care about players who use credit cards?
Credit card companies can be quite ruthless when it comes to casino transactions. They tend to charge high fees when you take out a gambling loan. They also do not take into account the reason for the loan. If a player at a casino uses his or her credit card to buy a drink, the credit card company also considers this a casino transaction. Some credit card companies accept receipts as proof of expenses for casino meals. Otherwise, any transaction in the casino will be difficult for players using their credit cards.
In addition, credit card companies treat casino transactions as cash withdrawals, eliminating the grace period. As a result, players are forced to pay a high interest rate along with a cash advance, with interest accruing almost immediately from the time of the transaction. The interest rate on an advance can be as high as 29-30% of the loan amount. In addition, the penalty for early repayment is a further 3 to 5% of the amount borrowed.
So with all these points in mind, it’s easy to guess that credit card companies and banks aren’t exactly customer friendly when it comes to casino credit card transactions. Although, given that very few banks allow credit cards as a means of payment on the gaming platform, the fact that casino transactions are considered legitimate transactions is also an advantage.
Need for the use of credit cards in casinos
There are a number of counter-arguments against the use of credit cards in casinos. Let’s see:
- High interest rate
- High cash advance
- No waiting time
- No rewards or credit points
- No special offers
Thus, players who use their credit card in online or offline casinos face difficult cashback conditions and do not receive any reward for the transaction.
Thus, the use of credit cards in online casinos benefits the banks because they earn more than they lend. Due to high interest rates and fees, players have to pay back much more than they borrowed from the bank.
Allowing credit card transactions as a valid method of payment is therefore only useful if the risk of non-payment or credit card fraud is removed. For gamblers, gambling-related credit card debt can not only be risky, but also difficult to manage.
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