Credit Card Promotion Angers MP’s

Gambling experts around the world agree; using a credit card to gamble is not a good idea. Unfortunately at most online bingo sites and casinos players have few alternatives. In the United States, where using credit cards to gamble is illegal, players have found alternative methods of funding their accounts. In the UK some members of Parliament are outraged by a bank’s promotion encouraging them to gamble using their credit cards.

Several MP’s have called for top executives at Lloyd’s TBS to be fired after the well-known bank sent out letters to credit cardholders suggesting that customers borrow to gamble. The letters sent by Lloyds, told cardholders that they would be able to use “up to 50% of this [credit] limit for cash withdrawals and cash related transactions such as gambling, the purchase of foreign currency, money orders and gaming chips.” Several of the contacted cardholders have high credit limits. One recipient of the letter told reporters from the Daily Mail that he had been given a high credit limit despite the fact that he only earns £12,000 annually and the job is his first.

Last year a promotion by Barclaycard encouraging users to make cash withdrawals drew the ire of consumer groups. Cash advances have high interest rates and handling fees. Philip Hammond, Tory shadow chief secretary to the Treasury expressed his outrage and told reporters “It beggars belief that a bank so heavily reliant on public funds is promoting itself as a provider of credit for gambling habits. Taxpayers who are on the hook for a bailout worth billions of pounds will be horrified.” Hammond asked Lord Myner, Financial Services Secretary to caution Lloyds about any similar promotions in the future.

Liberal Democrat Vince Cable agreed with his conservative colleague that action should be taken against Lloyds. Cable stated “The senior management who signed this off need to be fired. It’s quite extraordinary that a publicly owned company is effectively encouraging borrowers to gamble on their credit cards. It is exactly the type of stupid, irresponsible behaviour that has to be stopped.” Cable also said the promotion was even more offensive given the fact that banks have spent so much time and money explaining why they cannot lend to consumers and businesses that have good and excellent credit scores.

Credit card debt is widespread in the UK. In 2008 the average client of the Consumer Credit Counselling Service owed about £7,000 on credit cards. Online bingo and casino players can avoid high interest rates associated with gambling transactions by using a third party payment service like PayPal.

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