Some heavy casino gamblers have been receiving slick direct-mail come-ons for a new credit card designed to turn the perception of a cash advance, traditionally synonymous with a desperate need for funds, on its head. The Arriva card, which can only be used to get cash at casinos, removes two of the largest drawbacks for tapping into cash lines with your average Visa or MasterCard: the fact that only a fraction of a credit line can be turned into cash and the assortment of monetary penalties that come with advances, chief among them high interest rates that often soar into the neighborhood of 30% and kick in immediately after purchase.
Arriva cardholders get rates roughly 10% less than those that come with a typical cash advance, said Todd Smith, VP-card services at Global Cash Access, which, in addition to running ATMs and kiosks in most casinos, issues Arriva. Arriva's direct mailings list APRs from 15.49% to 24.49%; based on Arriva's figures, an average Visa user with a cash-advance APR of 29% will have an APR of 19% with Arriva.
Cardholders also get a grace period before interest starts to accrue and, the piece de resistance, a rewards program that gives them cash back or merchandise such as books, DVDs, electronics or pet supplies.
"Inside a casino, a cash advance is an entertainment purchase, and we treat it as such," Mr. Smith said. "We're working with people who have shown themselves to be responsible with gaming and with their finances. There's no reason for us to withhold their ability to do these transactions if they're good for them."
That bit of defiance is lost on those whose job it is to keep an eye on the estimated 2% to 3% of Americans who struggle with gambling addiction. For them, Arriva portends a dark day for problem gamblers. "As technology facilitates access to cash and credit, it gets the gambler ever closer to their funds," said Keith Whyte, executive director of National Council on Problem Gambling. "For someone with a problem, that can be really, really dangerous."
Mr. Whyte said Arriva isn't necessarily going to turn a recreational gambler into an addict, and he did give credit to GCA for making the card part of a program that allows anyone to block themselves from receiving cash from a GCA ATM or terminal. "It's a step that we applaud. At its heart, you can't make cash access safe for someone with a gambling problem. There's no way around it." Mr. Smith said GCA will deny Arriva applications from anyone known to be in such a program.
Several thousand people have signed up for Arriva since testing began in July. Those who received offers were culled from a GCA database of millions of casino gamblers. The selection criteria include credit history-the average FICO score is 704, 19 points below the national median-and whether the applicant has a history of getting cash advances in casinos (or trying to). GCA, which will begin to support Arriva with print and out-of-home ads next year via RowenWarren, New York, says about 40% of cash-advance attempts in casinos fail, in large part because of credit-card issuers' policies rather than applicants' creditworthiness.
One cardholder, Sridhar Prabhu, said Arriva is a welcome solution to the problem of carrying around large wads of cash, not to mention the forethought it takes to negotiate his $500-a-day ATM limit and the numerous cash-advance restrictions on his credit cards.