Mr. youngandthrifty kindly bought me a scratch and win lottery ticket a few months back. It was one of those expensive $20 scratch and win tickets that has a 1/3 chance of winning (I didn't win by the way).
He paid for it with his credit card at one of the British Columbia Lottery Corporation booths. He paid for it with the credit card so in hopes of accumulating more travel reward points with the now defunct MBNA Starwood Preferred Guest Mastercard. You can get the same scratch-and-win tickets at a gas station, convenience store, etc.
He was diligently reading his online statement (I trained him well) to make sure there weren't any weird charges on his card, when he saw this:
CASH EQUIVALENT TRANSACTION FEE:……………………………………………………………………….$7.50
He ended up calling the credit card company to inquire about this charge.
The credit card company said that it's charged automatically when you purchase any lottery ticket at a lottery booth with your credit card. They charge you this so it protects them with the “potential” winnings of the ticket you bought cost them money when you redeem your winnings.
From the Financial Consumer Agency of Canada Website, it says that credit card companies will ask you to:
“pay charges or fees for some other types of transactions that are like cash advances. These are sometimes called “cash-like transactions”, “cash-equivalent transactions” or “quasi-cash transactions”. These include wire transfers, money orders, travellers' cheques and gaming transactions (including betting, off-track betting, racetrack wagers, casino gaming chips and lottery tickets).”
The FCAC also has a handy chart that shows which credit card companies/ banks charge service fees for these transactions, and how much. I was surprised to see that different banks have different charges. Some don't charge anything and some have no maximums(GASP!)!
If you purchased this at a convenience store or at the gas station, the transaction will only read: CONVENIENCE STORE or GAS STATION so the credit car companies can't tell that you're secretly buying a lottery ticket with your credit card.
That $20 lottery ticket became a $27.50 lottery ticket that got me just a fleeting moment of excitement as I scratched the windows feverishly in hopes of winning.
Not worth it IMO. Gambling with lottery tickets isn't worth it either!
Did you know about this? Or should I have known this and was just living under a rock?