Ask Finder: Will using my credit card at a newsagency count as a cash advance?
While newspapers and stationery are everyday purchases, lottery tickets or scratchies will typically be processed as cash advances on your credit card.
Last weekend I used my credit card to buy $100 worth of lottery tickets at my local newsagency. I just checked my credit card account online and saw a cash advance fee was added a couple of days later. Is that because of the lotto ticket? How come it wasn’t added onto my purchase when I made it?
On the Money
Most credit card providers would classify buying a lottery ticket as a cash advance transaction because lotto and other forms of gambling give you a cash equivalent, rather than a tangible item like a newspaper. So, the cash advance fee on your account is a result of your $100 lotto purchase at the newsagency.
This fee is charged directly by your bank or credit card provider, which is why it was added a few days after the original lotto ticket purchase (and not at the time of the transaction).
Something else you should be aware of is that cash advance transactions almost always attract a higher interest rate from the time they are made, although it does vary by provider.
While your interest charges are only added at the end of each statement period, the amount you pay is calculated daily. This means the lotto purchase will continue to cost you money until you make a payment on your credit card to cover the $100 transaction.
As a side note, there are also some credit card providers that prohibit gambling transactions, including American Express, Citi and Suncorp. If you tried to buy your lotto ticket with a credit card from one of these providers – and the merchant has correctly classified your purchases as a gambling transaction – the transaction would be declined.
That’s not the case with your card, as the charges on your account have shown. So, if you want to avoid cash advance fees and charges when you pay for lottery tickets in the future, think about using your debit card or cash instead of your credit card.
Ask Finder is a regular column where Finder's expert writers answer your questions. All rates and fees are correct at time of publication and we only give general advice.
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