Gambling on credit cards to be banned from April

Gambling on credit cards to be banned from April

Gambling Commission issues new ban following review into online gambling. 

Brean Horne
Tue, 01/14/2020 – 12:43

Image

People are to be banned from using credit cards to gamble from 14 April 2020, following an announcement from the Gambling Commission.

The ban will apply to all online and offline gambling products except for ‘society lotteries’ that run for good causes.

It follows the Gambling Commission’s review of online gambling and a separate Government review of gaming machines.

A total of 24 million adults in Great Britain gamble, with 10.5 million of those gambling online.

UK Finance estimates that 800,000 people use credit cards to gamble.

Separate research undertaken by the Commission shows that 22% of gamblers using credit cards to gamble are classed as problem gamblers.

The ban aims to provide a significant layer of protection to vulnerable people.

Neil McArthur, gambling commission chief executive, says: “Credit card gambling can lead to significant financial harm.

“The ban that we have announced today should minimise the risks of harm to consumers from gambling with money they do not have.

“We also know that there are examples of consumers who have accumulated tens of thousands of pounds of debt through gambling because of credit card availability.

“There is also evidence that the fees charged by credit cards can exacerbate the situation because the consumer can try to chase losses to a greater extent.”

Mr McArthur highlights that although some consumers use credit cards because they were convenient, the risk of harm to others was too high to allow the use of credit cards to go on.

He continues: “We realise that this change will inconvenience those consumers who use credit cards responsibly, but we are satisfied that reducing the risk of harm to other consumers means that action must be taken.”

“But we will evaluate the ban and watch closely for any unintended circumstances for consumers,” he says.

Banks help customers fight gambling addiction

Some banks have introduced features to help you block gambling transactions.

Barclays was the first to do so at the end of 2018 by allowing customers to turn off payments to certain types of retailer, including gambling services.

The blocker can be turned on and off instantly in the Barclays banking app.

Since then banks such as HSBC and app-based bank, Monzo, have also introduced a gambling block feature which take this principle a step further.

Customer must give 48 hours’ notice in order to lift the gambling restrictions.

This adds an extra barrier against customers making impulsive gambling transactions.  

The table below rounds up the banks that offer gambling blocks and how much notice is required to lift the ban.  

Bank Card type Notice required to lift ban
Halifax Credit card and debit card 48 hours
HSBC Credit card and debit card 48 hours
Lloyds Bank Credit card and debit card 48 hours
MNBA Credit card only* 48 hours
Monzo Debit card only** 48 hours
Barclays Credit card and debit card None
NatWest Credit card only None
RBS Credit card only None
Starling Bank Debit card only** None
*debit cards not offered at the time of writing 14/01/2020
**credit cards not offered at the time of writing 14/01/2020
OneSite Article
54157f2f-3160-4dd7-869e-b43a683ebeda

Syndicate to OneSite
On

Queued for syndication
Off

Santander cuts the interest rate on its 123 account and introduces a new overdraft fee

Santander cuts the interest rate on its 123 account and introduces a new overdraft fee

Santander has become the latest bank to charge an overdraft fee of 39.9%

Stephen Little
Tue, 01/14/2020 – 12:11

Image

Santander is slashing the rate on its 123 current account from 1.5% to 1% on balances up to £20,000 from 5 May.

It will also cap cashback paid out at £15 a month. The account currently pays 1% on water bills, council tax and on Santander mortgage payments, 2% on gas and electricity and on Santander home insurance and 3% on phone, broadband, mobile and TV packages. Each category will be capped at £5.

There will be no change to the account fees, which will remain at £5 per month for 123 customers and £1 per month for the Lite Current Account. The range of household bills on which cashback can be earned will also remain the same.

Santander says the changes are being made as a result of the persistently low interest rate environment and the financial impact of regulatory changes in the banking industry.

The Santander 123 account was originally launched with an interest rate of 3% but was cut to 1.5% in 2016.

The cut means the account will be less attractive for savers, with the interest earned dropping by around £100 a year for those with the maximum balance of £20,000.

Andrew Hagger, a personal finance expert at Moneycomms, says: “The Santander 123 account was a stand-out deal in its prime and extremely popular, but in the last few years the offering has been gradually watered down and is now a shadow of what it was.

“There is still a little money to be made and even though the rate has been slashed to 1% that’s not a terrible deal in the current climate where the best easy access savings accounts are only paying around 1.35%.

“The cost of new overdraft regulation has seen Santander cap the cashback on direct debits to a maximum of £15 per month so it’s still possible to get a positive return after the £5 monthly fee but it’s nowhere near as attractive.”

Susan Allen, head of retail banking at Santander, says: “While we have had to make some difficult decisions in the current environment, our current account range remains very competitive.

“Our 123 accounts provide a range of benefits that we know our customers value and our goal is to ensure these accounts remain sustainable for the future.”

Alternatives

A number of banks have slashed their current account rates in the past year, while savings rates have also been falling.

The drop in rate puts the Santander 123 account well below the top easy-access rate from Gatehouse Bank at 1.40%.

It also falls short of the highest paying current accounts.

The current Moneywise Best Buy is the Nationwide FlexDirect which pays 5% interest on balances up to £2,500. This is an introductory 12 month offer – when it ends the rate drops to just 1%. Agreed overdrafts are free for the first year but you’ll need to pay in at least £1,000 a month.

The TSB Classic Plus pays 3% interest on balances up to £1,500. You will need to pay in at least £500 a month, register for internet banking, opt-in for online bank statements and paperless correspondence.

Overdraft fees

Santander is also scrapping its overdraft fees and introducing a single interest rate of 39.9% from 6 April.

It says that anyone using an arranged overdraft of less than £1,065 will pay less than they do today.

Santander currently charges £1 a day below £2,000, £2 a day £2,000 to £2,999 and £3 a day £3,000 and over.

How the changes affect you will depend on the size of your overdraft and how long you are overdrawn for.

If you had an overdraft of £200 for a month you would pay £31 under the current charges. With the new fees you will pay £2.89.

With an overdraft of £2,500 you currently pay £62 per month. Under the new charge structure you will be worse off as you will have to pay £72.36.

The bank says six out of seven customers who use an overdraft will pay less under the new charging structure.

This is happening because of a crackdown on overdraft charges by the Financial Conduct Authority (FCA).

Lenders make over £2.4 billion from overdrafts a year, with around 30% from unarranged overdrafts.

Under radical new plans from the financial watchdog, banks and building societies will no longer be able to charge higher interest rates on unarranged overdrafts than they do on arranged ones from 6 April 2020.

They will also not be allowed to charge fixed fees for overdrafts. Instead they will have to introduce a simple interest rate. Banks have responded by raising overdraft rates.

Other banks and building societies which have already raised overdraft rates include Nationwide, HSBC, NatWest, RBS and Barclays.

OneSite Article
6d4928b3-0dd7-492c-ade8-191efdea3e1a

Syndicate to OneSite
On

Queued for syndication
Off