HSBC reluctant to gamble on their credit cards

January 11, 2007

HSBC has announced that its prices are set to increase for anybody who gambles using their HSBC credit cards. This rise is no doubt going to cause some friction with its customers but is it really right to increase these charges?

Basically anybody who uses the card to gamble either online or over the telephone, will be charged at the cash advance rate rather than the ordinary purchase rate. The interest is set to be between 21.9% and 27.8% which is a rise up from the previous 15.9% to 22.9%. However, you will not have to pay the one off fee which is usually applied to other cash transactions.

HSBC is not the only bank to consider making these changes, though for many the reasons behind the change are completely different. Some banks are concerned that gambling using their credit cards is forcing their customers into bad debt which they simply cannot pay off. So, they are thinking bout highering these charges to see if it will help. HSBC on the other hand have said that is not the reason they are increasing their prices, they claim they are just trying to keep up with the competition. So, it seems that other banks do actually have their client’s interest more at heart than HSBC do!

At the moment banks do not have an average policy which relates to gambling using their cards. Many banks such as Barclays and Lloyds tend to charge their minimum rates whilst EGG, the Royal Bank of Scotland and MBNA tend to charge the cash advance rate.

There is a way to avoid these high charges with HSBC however and that is to pay through Paypal. Overall no matter what the reasons are for the rise in charges, it is certain that many customers will not be too happy.