Page 20 - November 2002 • Southern California Gaming Guide

SOUTHERN CALIFORNIA GAMING GUIDE
by Bill Burton
In this issue of the Southern California Gaming Guide, you have learned about the advantages of always using you player’s club card in the casino. But there is one card, however, that you should not use in the casino. That is you credit card. Yes, I know that you may need your credit card to make hotel reservations and to rent a car, but you should not use it to obtain money to gamble with.
The number one rule of gambling is:
NEVER BET MORE THAN YOU CAN AFFORD TO LOSE!
The casinos have a house edge on all games except for certain video poker games, card counting in blackjack and live poker. We refer to casino games as having a negative expectation. This means that over the long run the mathematics of the game will grind away at your bankroll. The built-in house advantage is how casinos make money. It is the price we pay to play. Consider it our price of entertainment.
Proper money management tells us to budget a given amount to gamble with and stick to that amount — win, lose or draw.
Which brings us to rule number two:
NEVER GAMBLE WITH BORROWED MONEY!!
Unfortunately, that is exactly what you are doing if you run out of money and decide to take a cash advance on your credit card at the casino. There are also hidden charges you may overlook if you decide to do this. I recently visited a casino and was waiting in line at the cashier’s cage to cash in my chips. There was very long delay and I dis- covered the reason was that the two people in front of me were getting a cash advance on their credit cards. Curiosity got the better of me and when I got to the window I inquired about the ner points of taking a cash advance on a credit card. The casino charges you a processing fee just for issuing you a check from your credit card for
$500 before you leave for home. Or if you do leave with any money it will get spent on something else.
The following month your credit card bill will arrive. Your balance is $537.65. You also nd out that on top of the three percent you had to pay to borrow the money, the interestrateforacashadvanceis5%higherthanthenormal15%youpayforpurchases.
Your new rate is 20 percent. Out of the goodness of their heart, the credit card company will allow you to make payments if you decide not to pay the balance in full. In fact all you have to do is make a minimum payment for the month. This is where people get into nancial trouble. Most people do not realize the consequence of making minimum payments. It will take a longer time to pay off the debt than you imagined. Here is a chart showing what it will take to repay that $537 at 20% interest
the cash advance,
depending on how much money you want. To get
a $500 cash advance the charge was $21.99. That is 4.4% paid to the casino up front. Most credit card
companies charge you 3% for cash advance, which will come to $15.66 (3% of $521.99)
That means you are already down $37.65 or 7.4% before you even sit down to play. That is the equivalent to sitting down at
a ve-dollar blackjack table and losing eight hands in a row or getting nothing back after putting three and a half rolls of quarters through a slot machine. If this happened, most of us would head for the
hills real fast—but you are just beginning and haven’t even started playing yet. Be honest. Chances are that if you felt Be Aware!! Cash advances on Credit Cards usually the need for the cash advance you will probably end up losing that
Credit card debt is the nancial ruin of many people these days. It is too easy to get caught up in the “Buy Now, Pay Later” mentality. The little chart above will hopefully put things in perspective. Every one of us should hesitate the next time we reach for the “plastic” in the casino.
Take a credit card with you to obtain hotel and car reservations, but don’t use it for frivolous cash advances.
Cash advances should be used for dire emergencies only! I don’t think a few more hands of blackjack or a few more pulls on the slot handle falls into this category.
Until next time, remember: “Luck comes and goes...Knowledge stays forever.”
Bill Burton is the Casino Gambling Guide and columnist for the popular Internet portal About.com. He also writes for several national gaming publications. See his articles at http://casinogambling.about.com. His book, Get the Edge at Low Limit Hold ‘em, will be released in November 2002.
result in additional fees and higher interest rates!
Page 20
NOVEMBER 2002