While it may be tempting to put a few lottery tickets on your credit card while making a purchase at a convenience store, it’s important to note that buying lottery tickets with credit cards is often a bad idea. Here are five smart reasons to only pay cash (or use your debit card) for your lottery purchases.
1. Charging Lottery Tickets Is Illegal in Most U.S. States
Lottery ticket laws aren’t simple in America. Depending on where you are, you might not be allowed to buy your lottery tickets with plastic. Over 40% of the U.S. states have laws against using a credit card for tickets. The federal government enforces broad lottery regulations within the United States, but individual states have jurisdiction over the finer points of buying and selling tickets. Whether or not you can charge tickets to your credit card is one of those finer points.
21 states plus the District of Columbia and the U.S. Virgin Islands prohibit lottery ticket sales on credit. However, research indicates that the following states allow credit purchases in (at least) some cases:
- New York
- Rhode Island
- South Dakota
So unless you’re making your purchase in one of those states, you can leave your credit card in your wallet when you go to make your picks.
If you’re in one of the states that allow you to charge lottery tickets, you still need to double-check your state lottery’s policies. Some of the listed states allow credit card purchases only at certain retailers or under specific conditions.
Remember that lottery laws apply to the state where you buy the tickets, not your state of residence.
2. Other Obstacles to Buying Lottery Tickets With Credit
Even when states allow you to use credit cards for lottery purchases, many merchants refuse to accept them. For example, the Pennsylvania Lottery website says that there are no laws against charging your lottery tickets in that state, but that most retailers don’t allow it.
And there’s another hurdle: Even if the state and the retailer are okay with it, some credit card issuers won’t let you use your card to gamble, including buying lottery tickets.
To find out if this is the case, you’ll need to check your card’s terms and conditions.
3. Charging Your Lottery Tickets Incurs Additional Fees
When retailers let you buy your lottery tickets with your credit card, they don’t treat them like other types of purchases. Rather, they handle lottery ticket sales as quasi-cash purchases.
A quasi-cash purchase means that instead of charging something directly, you’re actually getting a cash advance for the amount your tickets cost. And cash advances are a bad idea. Most credit cards charge additional fees for cash advances, and unlike with regular purchases, interest starts accruing immediately, not at the end of your billing cycle. Furthermore, those interest rates are usually higher than the rate for other purchases, which means buying your lottery tickets with credit cards can cost you significantly more than paying with cash or debit cards.
4. You Won’t Get Credit Card Rewards for Lottery Ticket Purchases
Some people pay for as many things as possible with their credit cards so that they can rack up rewards points. But those people will be disappointed if they think that the additional fees will be worth it, due to the points they accrue.
Most credit cards have restrictions about which types of purchases accrue points, and gambling purchases like lottery tickets don’t count.
5. Buying Lottery Tickets with Credit Cards Can Lead to Debt
Even if you were able to buy lottery tickets on your credit card legally and without any financial disadvantages, it would still be a bad idea. It’s too easy to get carried away and run up significant debt. For people who have (or who are vulnerable to) a gambling addiction, this is an obvious risk. But even if you haven’t had a problem with addiction in the past, gambling on credit is an unnecessary risk.
This risk is exactly why many states prohibit charging lottery tickets, especially since the people who are most likely to buy lottery tickets are also least likely to be able to pay off their credit cards. Furthermore, if you’re buying online lottery tickets with your credit card, you run the risk of being scammed. Your credit card, or even your identity, might be stolen.
If you are going to play the lottery, make sure that you abide by a strict budget. It’s a good idea to put cash aside for your purchase every month, and spend no more than you plan to. Leave your credit card at home and use cash to try to become a jackpot winner.