Cash Transactions Have A Wide Scope On Credit Cards

Some people have discovered that credit card companies have widened their definition of ‘cash’.

Withdrawals of cash at ATMs on credit cards have been subject to immediate interest payments for a very long time, and most people – although they may not like it – are aware of that fact.

Recently one customer discovered that he had been charged interest and a handling fee for transactions on his Lloyds TSB Mastercard that were not for cash withdrawals, but were for regular annual payments for his football pool entries. He approached Lloyds who told him that the transactions were now regarded as cash withdrawals, and, in addition were subject to the new gambling laws meaning that a 2.5% charge is also levied. The customer was particularly perturbed because part of the transaction was to assist a weekly draw to help the finances of a local hospice. It seems the bank is not being so charitable.

Lloyds TSB brought in new definitions for ‘cash’ transactions back in April of this year. The scope was widened so that transactions representing the sale of items which are directly convertible to cash were also counted as cash. These include betting, casino gaming ships, lotteries, money orders and wire transfer money orders. Such ‘cash’ withdrawals are subject to a cash handling charge (despite no actual cash being involved) of 2.5%, and like a real cash withdrawal, interest on the transaction straight away.

The only escape from this is to use a different method of payment and to not use a credit card for such transactions as most of the greedy credit card companies are employing the same tactics for interest, although not all of them charge the handling fee as well.

Remember, you can ‘vote with your feet’. Stop using the card for cash; stop wasting your money