Is buying a lottery ticket with a credit card a good idea?

Publish date: 2024-06-25

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Feeling lucky? Americans spent almost $108 billion on lotteries in 2022. The average person spends around $1,038 each year on lottery tickets. 

You can buy a lottery ticket in 45 states, but only 23 allow you to buy tickets with a credit card. Just because you can, though, doesn’t mean you should. 

High fees, interest, and inability to earn rewards are just some of the reasons you should avoid buying a lottery ticket with a credit card.

Can you buy lottery tickets with a credit card?

Yes, it’s possible to buy a lottery ticket with a credit card, though it depends on laws and regulations in your area and store policies.

First, only certain states allow you to make lottery purchases with a credit card:

If you don’t live in one of these states, you’re out of luck. And even if you do, there still may be additional laws that make using a credit card more difficult. 

Not all retailers accept credit cards. Some may require that you buy lottery tickets with an alternative form of payment like cash, debit cards, gift cards, or checks. 

In some states, you may be able to buy lottery tickets online, and payment options might include credit cards. But this depends on local laws and the lottery’s policies. 

Why you shouldn’t buy a lottery ticket with a credit card

Buying a lottery ticket with a credit card may be possible, but that doesn’t mean it’s a good idea. There are several reasons why. 

It may get charged as a cash advance

While card issuers often don’t explicitly prohibit using a card for lottery purchases, most will process the transaction as a cash advance. 

When you make a cash advance, you’re withdrawing cash against your credit limit. Your cash advance limit is a separate (much smaller) limit than your regular credit limit. 

Cash advances aren’t ideal for many reasons. There’s often an initial cash advance fee of up to 5% of the total transaction. The annual purchase rate, or APR, for cash advances is much higher than other purchases. Plus, interest begins accruing immediately. 

Credit card issuers likely treat lottery purchases this way because they’re seen as a high-risk activity, and classifying them as cash advances can help mitigate risk. Regulations tend to discourage extending lines of credit for gambling.

You likely can’t earn rewards

One of the main advantages of using a credit card to buy something is the rewards you’ll earn on that purchase. Most card issuers don’t offer credit card rewards on cash advances, eliminating the benefit. Though some cards offer rewards on entertainment purchases, the lottery isn’t included in this category. 

Some credit cards come with sign-up bonuses worth hundreds (or thousands) of dollars when you spend a certain amount within the first few months of opening the card. Because a lottery ticket is considered a cash advance, it won’t count toward the minimum spending requirement. 

You can fall into debt

Any type of gambling can lead to debt — and using a credit card to gamble can make that debt accumulate much faster.

“The lottery is not an investment. It doesn’t have good odds,” says Bradley Hilton, certified financial planner and founder of Sonas Financial Planning. “You should never take on high debt for gambling or speculative entertainment.” 

You’ve probably seen headlines about Powerball jackpots reaching hundreds of millions of dollars. Your odds of winning? One in 292 million. 

All credit cards charge interest. You may face interest charges if you don’t pay off your card in full each month. These charges can quickly snowball, especially if you can’t keep up with your payments.

The situation can worsen if your credit card classifies lottery ticket purchases as cash advances. As mentioned, cash advances usually have higher fees than regular purchases, and there’s no grace period. You’ll start accruing interest immediately, usually at a much higher rate. 

The bottom line

The idea of winning millions (or even billions) of dollars makes trying your hand at the lottery tempting. But before you buy a lottery ticket, make sure you’re paying in cash or another form of payment. 

Using a credit card to buy a lottery ticket is way more trouble than it’s worth. Often, it results in high fees, which can quickly snowball into a mountain of debt. Plus, you likely won’t earn rewards on these purchases.

Opinions expressed are author’s alone, not those of any bank, credit card issuer, or other entity. This content has not been reviewed, approved, or otherwise endorsed by any of the entities included in the post.

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