Cash News
If you won the lottery today, what would you do? It’s a fun fantasy that drives Americans to spend billions of dollars on lottery tickets every year. In fact, Americans spent over $113 billion on lottery tickets in 2024, according to the North American Association of State and Provincial Lotteries.
If you find yourself short on cash the next time you go to buy a lottery ticket, think twice before reaching for your credit card — even where it’s legal to use a credit card to buy lottery tickets, there are some major drawbacks to keep in mind.
Not all states operate a lottery, and some states have strict laws on what payment methods consumers can use to purchase tickets. In the U.S., 45 states and the District of Columbia operate a lottery — Alabama, Alaska, Hawaii, Nevada, and Utah do not. Of those, the following states permit you to use a credit card to buy lottery tickets:
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Arizona
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California
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Delaware
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Florida
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Idaho
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Illinois
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Indiana
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Kansas
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Kentucky
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Louisiana
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Maine
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Maryland
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Michigan
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Mississippi
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Missouri
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Nebraska
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New Jersey
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New Mexico
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New York
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North Dakota
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Ohio
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Oregon
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Pennsylvania
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Rhode Island
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South Dakota
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Vermont
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Washington
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West Virginia
Conversely, the following states have laws prohibiting the use of credit cards for lottery tickets:
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Arkansas
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Colorado
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Connecticut
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Georgia
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Iowa
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Massachusetts
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Minnesota
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Montana
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New Hampshire
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North Carolina
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Oklahoma
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South Carolina
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Tennessee
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Texas
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Virginia
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Wisconsin
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Wyoming
There may be added restrictions in states that permit you to use credit cards. For example, Florida allows you to buy lottery tickets with a credit card, but only if you purchase $20 of groceries or other items in addition.
Even if you live in a state that allows using credit cards to purchase lottery tickets, think twice before reaching for your card — there are several serious drawbacks.
Many credit card companies classify the purchase of lottery tickets as a “cash advance,” which means the transaction will incur an added cash advance fee. Most issuers’ fees vary between 3.5% and 5%, or $10, whichever is higher, according to Experian. So a $20 lottery ticket purchase could actually cost you $30 if your issuer charges you $10 in fees.
Not only do cash advances incur fees, but they’re also subject to a higher APR than other transactions. Cash advance APRs are usually about 30% — significantly higher than the standard APR for all credit cards — so interest will grow exponentially.
Related: What is a good interest rate on a credit card?
With regular credit card purchases, you can take advantage of the card’s grace period: the end of the card’s billing cycle and the payment due date. Typically, if you pay off the balance by the due date, you can avoid interest charges. However, that’s not the case for lottery tickets. Since they’re classified as cash advances, they begin accruing interest from the day of their purchase.
One of the reasons why people want to use a credit card to buy lottery tickets is the potential for rewards, such as airline miles. However, using your card may not give you the perks you expect — many credit card companies limit the type of transactions that can earn rewards; gambling and lottery tickets are typically excluded, so they’re not eligible for credit card rewards.
Read more: 9 weird ways to use a credit card and max out your rewards
Consider this: U.S. adults spend an average of $435 per year on lottery tickets. If you’re 25, and invested that amount in the stock market each year, you’d have over $229,000 by the time you reached the age of 65 (assuming a 10% average annual return).
Although using a credit card to buy a lottery ticket is possible in some states, it may not be a good idea due to the extra fees and interest you’d pay.
When it comes to playing the lottery, here are some other tips to participate safely:
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Set a limit: If you enjoy playing the lottery, that’s fine! Just plan for the expense. You can set aside a portion of the money you budget for entertainment or recreation. Just be sure to stop buying tickets once you reach the designated limit.
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Don’t give in to hype: When there’s a large jackpot or milestone award, it’s all over the news and social media. Even people who rarely participate are often tempted to buy a ticket. Try to avoid the hype. Only play if you want to, and only spend what you can afford from your budget.
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Only spend cash: Instead of using a credit card, use paper bills or a debit card. This approach will ensure you only spend money you have, and you won’t have to worry about added fees or interest.
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Prioritize financial goals: If you want to buy lottery tickets, meet your other financial obligations first. Focus on building an emergency fund, paying down debt, and saving for retirement. If you’re doing those things and don’t money to spare, forgo splurging on tickets until you’re on firmer financial ground.
This article was edited by Rebecca McCracken
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