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September
15, 2006
Casino
Credit Card Makes Big Splash with Gamblers
The Arriva Card, a private-label credit card marketed to "prime"
casino gamblers, announced earlier this week that it has signed
up its first 1,000 cardholders and has seen $2.5 million in
transactions in its first weeks of limited marketing. While
the numbers are extremely modest by the standards of big credit
card issuers, Arriva Card, Inc. says that its direct mail response
rate is 1.36%, well above the industry standard of 0.3%, and
that is targeting only the most credit-worthy customers. In
addition, the company says the average cash advance on an Arriva
Card is nearly twice as large as those done on non-Arriva credit
cards.
While
the appeal of using credit to fund gambling purchases is obvious,
Arriva is understandably emphasizing a focus on good-credit
customers and responsible gaming. Witness the statement from
Todd Smith, vice president for card services at Global Cash
Access, Inc., parent of Arriva Card, Inc.: "It's very exciting
to see how many experienced, responsible gaming customers with
strong credit ratings have applied--and qualified--for an Arriva
Card during the initial few weeks of our direct mail marketing
effort. It really shows that savvy gaming customers know they
don't need to be penalized by traditional credit cards' terms
for cash advances and are eager to embrace an alternative that
treats them better."
Smith's
specific reference to cash advances is appropriate because the
Arriva Card's main selling point is that it offers better terms
for these advances--which are what gamblers use to access more
cash on the casino floor--than could be achieved through traditional
credit cards. Arriva Card offers a grace period on cash advances,
as well as a rewards program on cash advances. Most card companies
offer no grace period on such advances, meaning cardholders
begin paying interest immediately, and cash advance interest
rates are usually significantly higher than rates on regular
credit card purchases.
Arriva
Card says it is accepted at over 700 gambling destinations.
The card is not associated with a network such as MasterCard,
Visa, American Express or Discover, so it can not be used as
a general credit card for typical credit card purchases.
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