# Don't Buy Lottery Tickets with a Credit Card



## Mookie (Feb 29, 2012)

Today I noticed a strange $5 charge on my PC Mastercard today called "Cash Equivalent Fee", so I called and asked about it. It turns out that for most credit cards, when you buy lottery tickets, they will charge some kind of “cash equivalent” transaction fee, similar to a cash advance.

Looking at my cardholder agreement, this fee applies to wire transfers, money orders, traveller’s cheques, permitted gaming, and purchases of lottery tickets and casino gaming chips. I guess most of these make sense, but a lottery ticket?? That’s quite a stretch! 

Am I the only one who didn’t know this? 

So my $10 losing ticket actually cost me $15. Lovely. :apologetic:

For future reference, there are two ways to save money in this situation:

Don’t buy lottery tickets with a credit card
Don’t buy lottery tickets


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## james4beach (Nov 15, 2012)

Yes, I think anything you purchase that is considered cash equivalent will have both this fee, and will *immediately start accruing interest* at the cash advance interest rate. To avoid further fees, you may want to immediately pay the entire credit card balance without waiting for monthly statement.

The same thing is true for bitcoin and crypto currency purchases.


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## Mookie (Feb 29, 2012)

james4beach said:


> Yes, I think anything you purchase that is considered cash equivalent will have both this fee, and will *immediately start accruing interest* at the cash advance interest rate. To avoid further fees, you may want to immediately pay the entire credit card balance without waiting for monthly statement.
> 
> The same thing is true for bitcoin and crypto currency purchases.


Thanks James - I specifically asked about interest charges related to this, and at least in my case there are none - just the flat $5 fee. There is no need to immediately pay off the current credit card balance.

I still don't get the logic of how lottery tickets are lumped into the same category as everything else on this list. All the other items are currency exchanges from one form to another, however I wouldn't call a lottery ticket currency, and I definitely can't exchange it back into $10 like I could with the rest. Anyway, live and learn...


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## Mukhang pera (Feb 26, 2016)

Mookie said:


> For future reference, there are two ways to save money in this situation:
> 
> Don’t buy lottery tickets with a credit card
> Don’t buy lottery tickets


I think option #2 is the better one. I learned the same lesson about credit card purchases, the same way, some years back. That was probably my last lottery ticket purchase.

I have never been "lucky" with such things, while perhaps some are. One hears of people with multiple wins. So no point in me buying tickets.

Some years ago, I worked in an office with a total staff of about 16. Lotto 6/49 in BC was then drawn twice a week and tickets cost a buck. We each put in $2/week so we would hold 16 tickets for each draw. In the 4 years or so I was there, I think we won about $90 a couple of times and a few $10 wins. Not much of a return on $32/week for 4 years (about a $6,000 loss). I only stayed in the pool because I feared that if i dropped out, my colleagues would win big and all retire, leaving me on my own.

I am not sure, but the cash advance fee might perhaps be avoided if one makes a payment on the cc _before_ making the lottery ticket purchase, so that one is in a net credit position when the transaction occurs. I would think that if you had run up, say $500 in purchases since paying your last statement balance in full (which I expect most here do every month), and, to be safe, you made a payment of $600 on the card, creating a $100 credit balance, the issuer might be hard pressed to say you took a $5 "advance". What was advanced was, in reality, your own money. But then, the written agreement might say you have to pay, even to be advanced your own money.


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## scorpion_ca (Nov 3, 2014)

You can ask them to refund you the $5 as an one time exception. I use my MBNA card at Petro Canada station to buy lottery tickets and they never charged me anything.


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## Mukhang pera (Feb 26, 2016)

scorpion_ca said:


> You can ask them to refund you the $5 as an one time exception.



How does one go about asking? One way, I suppose, is to phone. Then one will get the answering device that invariably says something like "We are currently experiencing an unusually high call volume", so "you might just be stuck on hold for an hour or so and will only get to talk to a real person if you are pressing and persistent and assign no value to your time."

I think I'd just as soon write off the fiver.


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## ian (Jun 18, 2016)

I buy a lottery ticket almost every week. $10. On my credit card. Never, ever been charged more than $10. Perhaps it has more to do with the retailer than with the card.


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## newfoundlander61 (Feb 6, 2011)

I don't buy lotto tickets but did not know about that charge.


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## Mookie (Feb 29, 2012)

Mukhang pera said:


> How does one go about asking? One way, I suppose, is to phone. Then one will get the answering device that invariably says something like "We are currently experiencing an unusually high call volume", so "you might just be stuck on hold for an hour or so and will only get to talk to a real person if you are pressing and persistent and assign no value to your time."
> 
> I think I'd just as soon write off the fiver.


Since I didn't know what this Cash Equivalent Fee was in the first place, I started by calling PC MasterCard Customer service. Once they explained what it was, I did ask them if they could waive this fee this time, as I was unaware of it, but they were unwilling to do so. 

Oh well, that's a $5 penalty to me for not thoroughly reading my cardholder agreement...


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## Beaver101 (Nov 14, 2011)

^ That would sucks for a one-(life)time exception. 

But then if you do get points (or cashback?) for that $10 purchase, that might make up partly for it. If not, then would also need to read those other fine points of what "qualifies" for rewards under the PC cc (I don't have one as not fan of Loblaws).


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## new dog (Jun 21, 2016)

For me something just doesn't seem right using a credit card to buy lottery tickets or any kind of gambling, so I have never done it. The wife is in a group at work that buys tickets and that is good enough for me.


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## My Own Advisor (Sep 24, 2012)

It never occurred to me it was a good idea to a) use credit to b) gamble. Good lesson learned from the OP! Hopefully it helps other folks.


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## carson (Apr 28, 2011)

Mookie said:


> Today I noticed a strange $5 charge on my PC Mastercard today called "Cash Equivalent Fee", so I called and asked about it. It turns out that for most credit cards, when you buy lottery tickets, they will charge some kind of “cash equivalent” transaction fee, similar to a cash advance.
> 
> Looking at my cardholder agreement, this fee applies to wire transfers, money orders, traveller’s cheques, permitted gaming, and purchases of lottery tickets and casino gaming chips. I guess most of these make sense, but a lottery ticket?? That’s quite a stretch!
> 
> ...


Interesting, I've never heard of the cc company charging this fee either.

I can tell you that most retailers, especially small ones, won't accept cc payment for lotto tickets. cc companies charge the retailer a fee, a percentage of the purchase price and often also a per transaction charge. Retailers are paid a percentage of the lotto sales by the lottery company. So if the lotto company pays you say 4% and the cc company charges you 2% plus a .20 cent fee for the transaction.. The retailer isn't making anything selling the 10$ lotto ticket.

Debit transactions are a per transaction fee only and not a % of total sale so they are accepted.


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## kitbuilder (Aug 15, 2013)

This happened to me about 4 years ago. Bought $40 worth of scratch and win tickets as a gift on March 25 with my plain vanilla BMO Mastercard. BMO then charged $2.75 as a cash advance fee on March 27, followed by $0.08 interest on the cash advance on March 28, which is my statement date. I paid my Mastercard in full on April 15. BMO then proceeded to charge another $0.32 interest on the cash advance on April 28.

The funny thing is I'd last used my credit card to buy lottery tickets as a gift 7 years before that, was charged then too, but had forgotten. So thanks for the reminder!


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## Beaver101 (Nov 14, 2011)

carson said:


> Interesting, I've never heard of the cc company charging this fee either.


 ... same here ... or until now which seems to be unique with the cc from the PC Financial brand. Wonder what they'll amend next in their fine print to ding ya for "cash equivalent" purchases ... gift cards? transit tickets? postage stamps? medicinal cannabis? 



> I can tell you that most retailers, especially small ones, won't accept cc payment for lotto tickets. cc companies charge the retailer a fee, a percentage of the purchase price and often also a per transaction charge. Retailers are paid a percentage of the lotto sales by the lottery company. So if the lotto company pays you say 4% and the cc company charges you 2% plus a .20 cent fee for the transaction.. The retailer isn't making anything selling the 10$ lotto ticket.


 ... understandable, particularly with smaller retailers since it eats into its profit margin.


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## Apricot (Jun 20, 2020)

Mookie said:


> Today I noticed a strange $5 charge on my PC Mastercard today called "Cash Equivalent Fee", so I called and asked about it. It turns out that for most credit cards, when you buy lottery tickets, they will charge some kind of “cash equivalent” transaction fee, similar to a cash advance.
> 
> Looking at my cardholder agreement, this fee applies to wire transfers, money orders, traveller’s cheques, permitted gaming, and purchases of lottery tickets and casino gaming chips. I guess most of these make sense, but a lottery ticket?? That’s quite a stretch!
> 
> ...


I realized it only charges that fee if one uses the credit card to buy lottery tickets directly from the lottery kiosks. It does not incur any additional charge for my numerous credit card lottery purchases from 7-11 nor together with groceries from SuperStore.


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## ImmortalIF (Aug 14, 2019)

From what I remember, its gambling. Credit for gambling is what it is called. Lotto transactions are coded as cash and this is why when using credit to buy lotto it is a cash advance. Some merchants are able to switch this I believe - normally if I do buy lotto at a store I just buy it with another item such as gum or something.


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## newfoundlander61 (Feb 6, 2011)

Surprising to hear investors on this forum buy lottery tickets, thats one thing I will not buy. Interesting


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## Plugging Along (Jan 3, 2011)

I buy the occasional ticket. Usually when I am annoyed with work and if the jackpot is really high. Always in cash, but I use cash a lot. 

I also always participant in any lottery pool that is offered with people I work with. I don’t want to be the person stuck if they do win. 

Most I have won is almost $1000. It’s not a big deal, I take it as a form of entertainment.


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## Mukhang pera (Feb 26, 2016)

Plugging Along said:


> ...
> I also always participant in any lottery pool that is offered with people I work with. I don’t want to be the person stuck if they do win.
> 
> Most I have won is almost $1000. It’s not a big deal, I take it as a form of entertainment.


Me too. Office pools. I was in one for 4 years. That was back when BC had something called 649. Tickets were $1 and there were 2 draws per week. So all 16 of us in the office put in $2 each week, so we would have 16 tickets for each draw. In 4 years we won $10 maybe a dozen times and about $90 a couple of times. That was it. But, like PA, I stayed in the pool out of fear that, if I dropped out, the others would win big and I would be sitting there with zip and everyone telling me how great it was to win big and retire, or whatever.

It's been many a year since I bought a lottery ticket because I pay enough tax as it is. 

It would be nice if there was a little more honesty in the language surrounding lotteries. BC came up with a new ticket (still, years ago, maybe gone now) they called "Scratch and Win". More apt would have been "Scratch and Lose". They had machines into which you could insert a ticket in and the machine would tell you if the ticket had won anything. If, as in 99.99999% of cases, the ticket was a loser, the machine would read: "Not a Winner". Better to be more frank and say: "Another Loser".


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## scorpion_ca (Nov 3, 2014)

I have been managing an office pool of 25 members since 2012. I don't feel bad as the money goes to healthcare, infrastructure and etc.

$2/per week. 
Total spent $16,470.
Cash winnings $2,063 so far. However, we get free plays on every week.


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## mattw (May 14, 2013)

Mukhang pera said:


> I think option #2 is the better one. I learned the same lesson about credit card purchases, the same way, some years back. That was probably my last lottery ticket purchase.
> 
> I have never been "lucky" with such things, while perhaps some are. One hears of people with multiple wins. So no point in me buying tickets.
> 
> ...


I never buy lotto tickets but always contribute to work lotto pools. Losing a couple dollars as insurance for not hating my life decisions forever if co-workers won is worth it to me.


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## JohnTobbs (Jun 24, 2020)

First time that I hear about this. Thanks for letting me know about lottery tickets - possible fees.


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## WGZ (Feb 3, 2017)

I get them at Petro or Esso gas stations. Looks like I'm getting 2% cash back on the purchases, as they consider it gas/fuel on my Tangerine Mastercard.

I only buy the cheap tickets with better chances just for fun. There's way more tickets you can get for $1-3. I stopped Lotto 649 and Lotto Max. I don't need to win the highest prizes.


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## calm (May 26, 2020)

I purchase my tickets on-line and use a VISA credit card and no extra charges for doing so.


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## MrMatt (Dec 21, 2011)

Mookie said:


> Since I didn't know what this Cash Equivalent Fee was in the first place, I started by calling PC MasterCard Customer service. Once they explained what it was, I did ask them if they could waive this fee this time, as I was unaware of it, but they were unwilling to do so.
> 
> Oh well, that's a $5 penalty to me for not thoroughly reading my cardholder agreement...


I've honestly never seen this, but reports are PC mastercard definately does this.


https://www.pcfinancial.ca/docs/default-source/legal-stuff/disclosure_summary_en.pdf



Scummy practice IMO. If it's a purchase it's a purchase.


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## scorpion_ca (Nov 3, 2014)

I use PC WE MC to purchase lottery tickets from Mobil gas station, Circle K and small store in our area but never paid any additional fees.


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## dubmac (Jan 9, 2011)

On a slightly different topic, but related to credit cards and fraud, A few years ago, I was given a $500 gift card - the 500 credit was on a "Joker" Mastercard. Recently, I had some car repairs and looked to use the credit to pay for the repairs, only to find the credit gone. I did some research & found these cards had experienced widespread hacking. I called the company, they denied that the card was hacked. Avoid these gift cards & if you have one, spend the money now.


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## Tostig (Nov 18, 2020)

scorpion_ca said:


> I have been managing an office pool of 25 members since 2012. I don't feel bad as the money goes to healthcare, infrastructure and etc.
> ...


When I see commercials on TV reminding me of this, my first thought is "then what are my taxes doing?" In which case, I also remind myself of all the tax cuts and budget cuts we had received in the past thirty years. Which inevitably makes me feel guilty for inadequately funding our healthcare system because I don't participate in this voluntary taxation program.


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