Westpac raises interest rate on credit card payments for gambling
The bank charges 22.95 per cent interest on “cash advances” on its Hotpoints Mastercard, and from November 30 payments to gambling accounts, or to buy cryptocurrencies will be considered cash advances.
Ordinary purchases made on Westpac's standard Mastercard incur interest of 20.95 per cent, unless the cardholder clears their balance by their monthly payment date.
The move has prompted the Problem Gambling Foundation to call for an planned review of gambling laws to consider following the Britain’s Gambling Commission in banning payments from credit cards to gambling companies.
The British Gambling Commission said it imposed the ban after research identified a high proportion of problem gamblers used credit card debt to fund their addiction.
Problem Gambling Foundation spokeswoman Andree Froude said people were gambling more online and “obviously credit cards provide a means for them to do that when they don’t really have the money”.
“I think the move to ban credit cards would be a good one,” she said.
The Gambling Act was nearly 20 years old, and since it came into force in 2003, there had been enormous technological change, including the ability of people to gamble online at both New Zealand and overseas gambling companies, Froude said.
The Department of Internal Affairs did a review of online gambling several years ago, and expected the results to be published soon, along with options for regulation, she said.
A Westpac spokesman said most “quasi-cash transactions are used to fund online gambling.”
Customers could avoid paying interest by using their debit card instead for these type of transactions, she said.
Froude said Australian-owned banks like Westpac should do to more to help gambling addicts protect themselves.
Kiwibank announced in April it would allowed problem gamblers to put voluntary gambling blocks on their credit cards to prevent them from borrowing to gamble.
The block had been used by 127 customers, avoiding an average of $13,000 each year on gambling spend, the bank said in its sustainability report.
Froude said the foundation had asked banks to offer similar blocks.
Westpac in Australia, Commonwealth Bank of Australia (the owner of ASB) and National Australia Bank (owner of Bank of New Zealand) all offered Kiwibank-style voluntary gambling blocks, but their New Zealand subsidiaries did not.
“We would strongly encourage all banks to do this because it helps people,” Froude said. “It's a tool, and a very good one.”
Westpac said the move was about creating more “consistency” for customers.
Other types of payments covered by the change include sending money overseas, buying cryptocurrency and sending money to share investing platforms like Sharesies.
Sharesies’ co-chief executive Leighton Roberts said few of its investors used credit cards to top up their accounts.
Kiwibank’s terms and conditions said cash-like transactions included the purchase of gambling chips or foreign cash.
ANZ’s definition included buying gift cards, prepaid cards, foreign currency, traveller’s cheques, money transfers, wire orders or gambling chips, or topping up gambling accounts.