Ask Finder: Will using my credit card at a newsagency count as a cash advance?

Posted: 13 February 2019 2:05 pm
News

While newspapers and stationery are everyday purchases, lottery tickets or scratchies will typically be processed as cash advances on your credit card.

Hey guys,
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?
Thanks,
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.

Do you have a question? Reach out in the comments or speak to someone from our 24/7 customer service team.

More Ask Finder questions

Picture: Shutterstock

Get more from Finder

Ask an Expert

You are about to post a question on finder.com.au:

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • finder.com.au is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Finder only provides general advice and factual information, so consider your own circumstances, or seek advice before you decide to act on our content. By submitting a question, you're accepting our Terms of Use, Disclaimer & Privacy Policy and Privacy & Cookies Policy.

3 Responses

  1. Default Gravatar
    DesFebruary 28, 2019

    Further to the question of credit card charges, even if you buy a birthday card, my bank informs me you will be charged the fee. IS THIS LEGAL for them yo do this

    • Avatarfinder Customer Care
      AmyMarch 1, 2019Staff

      Hi Des,

      Thanks for your question – I thought I’d jump in with a reply as well. The short answer is yes, it’s legal. Usually, for a birthday card, this would be processed as a purchase and no cash advance fee would apply. But if it was processed as a gambling transaction, then it would attract the cash advance fee. This depends on how the merchant is categorised by the issuer.

      Hope that helps.

    • Avatarfinder Customer Care
      NikkiMarch 1, 2019Staff

      Hi Des,

      Thanks for reaching out! All purchases made on the credit card is money borrowed and if you pay past the due date or pay late you will be charged a fee. Hope this clarifies!

      Best,
      Nikki

Ask a question
Go to site