Betting With A Credit Card? Don’t Do it

Dozens of states have legalized online sports betting since the U.S. Supreme Court ruled the Professional and Amateur Sports Protection Act (PASPA) unconstitutional.

In an effort to boost the controversial industry, many states have allowed online gambling with credit. Sports betting is regulated at the state level, so states decide whether credit cards can be used for online sportsbooks.

While credit card usage can build credit, credit cards also pose serious financial risks, especially when using them to fund an online sports betting account.

We recommend avoiding online sports betting entirely, as 30-45% of online sports bettors experience problems. Betting sites like DraftKings, FanDuel and Bet365 are designed to be addictive, and their acceptance of credit cards is one of many reasons to avoid them.

Gambling debt in any form is one of the hallmarks of an addiction.

Should You Gamble With a Credit Card?  

Some credit card companies view gambling as an unacceptable purchase because of the risk involved, which can lead to these charges being declined or flagged as potential fraud. 

If an online gambling charge goes through, they can sometimes be treated as cash advances rather than a normal purchase on credit, which can end up lowering your credit score and creating a situation where you can have serious debt accumulation. 

Most cash advances have a transaction fee (often 5% of the transaction amount) along with a potential separate, cash-advance APR for which interest starts accruing instantly.

Credit card companies treat these as cash advances as opposed to normal transactions because you’re purchasing gambling credit—a cash alternative—rather than a normal product. 

Some sportsbooks also charge deposit fees when using a credit card. 

And lastly, it can be a recipe to generate overspending and credit card debt. Controlling your gambling can prove more challenging when you’re using credit.

Using a credit card for sports betting could lead to you developing unhealthy habits that could negatively impact both your financial and mental health.

Visa & Mastercard Online Sports Betting Risks

Using Visa and Mastercard for online sports betting involves several risks that can impact both financial security and personal well-being. Here are some of the key risks associated with using these payment methods for online sports betting:

1. Financial Risks

• Overspending: Online betting platforms make it easy to deposit funds quickly, which can lead to impulsive betting and overspending.

• Debt Accumulation: The convenience of using credit cards can result in accumulating significant debt, especially if one is not mindful of their spending.

• High-Interest Rates: Carrying a balance on a credit card used for gambling can result in high-interest charges, compounding financial issues.

• Hidden Fees: Some banks or card issuers may charge additional fees for transactions related to gambling, adding to the cost of betting.

2. Fraud and Security Risks

• Data Breach: Online betting sites, especially less reputable ones, may not have strong security measures in place, increasing the risk of data breaches and theft of personal and financial information.

• Phishing Scams: There are numerous phishing scams targeting online bettors, where fraudsters pose as regulated betting sites to steal credit card details.

• Unregulated Sites: Using credit cards on unregulated or illegal betting sites increases the risk of fraud and the inability to recover lost funds.

3. Reputation Risks

• Credit Score Impact: Frequent transactions related to gambling can impact your credit score, especially if payments are missed or balances are carried forward.

• Bank Monitoring: Some banks monitor gambling-related transactions and may take action such as reducing credit limits or closing accounts.

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