How the Credit Card Accountability Responsibility Disclosure Act affects Casinos Patrons
Your valued gaming patrons may have credit card balances with different APRs because part of their balance is due to cash advance activity and part is from purchase activity. The Credit Cardholder’s Bill of Rights requires that any amount they pay over the minimum must be applied to the balance with the higher APR first.
Background. Credit card advance or quasi-cash transactions in casinos and purchase terms often vary, sometimes considerably. For starters, cash advances or quasi-cash transactions in casinos have higher fees and APRs than a typical purchase transaction at your grocery store or gas station, although a few banks charge the same rate for any balance type. For example, a bank may charge a 10-12% interest rate for purchases and may charge 19-22% for cash advances in a casino starting the date the transaction was completed with an additional backend onetime fee of 3-5% of the amount requested.
Prior to the act, many banks would apply the cardholders’ payments first to the balance of the purchases, and then to the cash advance balance. This tactic has the consequence that most cardholders are unaware of, as not paying your card off in full could result in years of higher interest rate cash advances never being touched.
Credit card cash advance patrons in casinos may have just gotten the break they were looking for with the recently passed Credit Card Accountability Responsibility and Disclosure Act which will give cash advance cardholders more visibility on how their payments are applied. The law that went into effect in February of this year still allows banks to apply minimum cardholder payments to the purchase portion only if they decide to do it that way, however, any payment amount beyond that is required to be applied to other balances like cash advances.
While a relatively small portion of credit card cash advances in casinos are business or corporate credit cards, it should be noted the Act does not apply to them.
Summary. The Act would appear to be a net positive for casino cash advance patrons, but knowing the card issuers, it is still yet to be determined how they may make up for any shortfall in interest revenue. Sightline Payments has taken a differentiated approach to cash advances with pricing and solutions that offers gaming operators and their patrons better products, better service, at a better price.
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About the Author: Kirk Sanford, Sightline Payments CEO and principal founder, is a pioneer and leader in gaming payment and marketing solutions. Prior to this role, Mr. Sanford was the CEO and President of Global Cash Access for more than a decade and under his entrepreneurial leadership took GCA from a start-up company in 1994 to a more than $1Billion NYSE public company. Mr. Sanford has also been involved with a number of other successful businesses including his role as Chief Executive Officer, President and Owner of Central Credit, a provider of gaming patron credit information services to casinos throughout the world. Mr. Sanford was featured by Business Week as one of the Top 100 CEO’s Under 40.
About Sightline Payments
Sightline Payments targeted mission is to be one of the gaming industry’s preferred cash access and ticket redemption providers by focusing on delivering outstanding value, continuous innovation, exceptional guest experience, and consistently fulfilling a Customer Focused promise. Sightline Payments is headquartered in Las Vegas, NV. For more information, please visit www.sightlinepayments.com or contact Diran Kludjian at 702-851-4747 x 204.