2nd April 2006

Card firms are starting to make changes to their terms and conditions for to take account of customers who use their plastic to bet at online gambling websites.

Card issuers previously treated these transactions in the same way as normal purchases, but the industry is now changing to regard these payments as cash withdrawals.

As a consequence online gamblers who deposit funds to their online betting accounts using credit cards will be subject to higher rates of interest, depending on your card this could be as much as 30% APR. In addition, transactions will attract cash advance fees which are typically 2% with a minimum charge of £2.

Furthermore there is no initial interest-free period for cash advances which is typically between 45 and 59 days for purchases, so gamblers will be charged high rates of interest from the date of each transaction.

Egg changed its terms and conditions for its three million cardholders on 1st April 2006, and Royal Bank of Scotland will make this change on 1st May 2006. A spokeswoman said: 'The gambling transactions are to be treated as advances as this is felt to be a more accurate means of reflecting that a gambling transaction is effectively a cash equivalent exchange.' More card companies are expected to follow in the coming weeks.

To avoid the new charges, online gamblers could fund their betting account using a debit card, an e-wallet service, such as those provided by Neteller or FireOne or better still quit gambling!