Can you buy gift cards with a credit card?

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There are many reasons people wind up buying gift cards with a credit card, including for the sake of convenience. If you’re buying groceries at the supermarket, then why not add a needed gift card to your cart?

Aside from random gift card purchases for birthdays or teacher gifts, some people also go out of their way to buy gift cards with a credit card, usually to earn rewards or save money on a specific purchase.

“Can I buy a gift card with a credit card?” is a common question among consumers, and you should know the answer is a resounding yes. With that being said, you should make sure you understand the pros and cons, along with the potential pitfalls, before you do so.

How to purchase gift cards with a credit card

Buying gift cards in person is a breeze regardless of how you decide to pay. When you buy a gift card with a credit card in person, you simply bring the gift card to the register and choose credit as your form of payment.

The scene is similar when you buy a gift card online and pay with a credit card. If you want to buy an Amazon.com gift card online, for example, you would simply head to Amazon.com and select whether you want a gift card mailed to you, one you can print at home or a gift card via email. From there, you add the gift card to your online cart and proceed to the payment page as normal.

Plenty of other websites let you buy gift cards and pay with a credit card using a similar method, including Staples.com, Walmart.com and Target.com.

Can you earn credit card rewards doing so?

One major benefit of using a credit card to pay for gift cards is the fact you can earn rewards on your purchase. If you plan to give someone a $50 gift card for their birthday, for example, you could buy a gift card with plastic and earn points or cash back on that purchase, whereas you wouldn’t earn anything if you gave them a $50 bill instead.

Just make sure you pick the right type of rewards credit card for your gift card purchases. Some rewards credit cards only let you earn cash back, while others offer flexible rewards or points you can use in a specific airline or hotel program.

Should you purchase gift cards with a credit card?

There’s nothing wrong with paying for gift cards with a credit card, but you should know there are some major pros and cons in doing so.

Advantages include the potential for rewards on your spending, although how much you’ll earn depends on the cash back credit card or rewards credit card you have. It’s also common to find ways to buy gift cards at a discount so you can save money on a large purchase. For example, many people buy Disney gift cards at Target with the Target Redcard in order to secure 5 percent off. That may not sound like a big deal, but saving 5 percent off a Disney vacation that costs thousands can be worth the extra trouble.

As a side note, buying gift cards from small businesses can also be a helpful move if you want them to survive the economic impact of COVID-19. By buying gift cards now, you can send businesses some much-needed cash and wait to redeem your gift card for goods or services at a later date.

On the flip side, some retailers limit how many gift cards you can buy, and particularly when you pay with a credit card. Some rewards credit cards also claim in their fine print that you won’t earn any cash back or points, although this isn’t necessarily true. With The Amex EveryDay® Credit Card from American Express, for example, the terms and conditions state you earn rewards on “eligible purchases,” and that this does not include “fees or interest charges, cash advances, purchases of traveler’s checks, purchases or reloading of prepaid cards, purchases of gift cards, person-to-person payments, or purchases of any cash equivalents.”

Does purchasing a gift card count as a cash advance?

You should also be aware that some credit cards threaten to treat gift card purchases as a cash advance. In this case, you would be charged a cash advance fee and a higher interest rate, to boot.

Generally speaking, gift cards code as a cash advance when you buy them directly from a financial institution, or when you buy a prepaid card instead of a gift card. However, you can get around this by buying gift cards within your normal shopping, such as in your weekly grocery haul at the supermarket.

You can also get around dealing with surprise cash advance fees by asking retailers if their gift cards code as a cash advance or purchase before you buy, or you can call your card issuer and ask them to turn off cash advances on your card altogether.

Best credit cards for purchasing gift cards

The best credit cards to use for gift cards are ones that let you rack up as much in rewards as you possibly can. With that being said, you should choose a credit card for gift cards carefully and based on the type of rewards you hope to earn.

Here are some of the top credit cards for gift card purchases, along with where they work best:

Blue Cash Preferred® Card from American Express: Best for U.S. supermarket purchases

The Blue Cash Preferred® Card from American Express lets you earn 6 percent back on up to $6,000 spent at U.S. supermarkets each year (1 percent after that), 6 percent back on select U.S. streaming services, 3 percent back at U.S. gas stations and on transit and 1 percent back on other purchases. You can also earn 20% back on Amazon.com purchases on the Card within the first 6 months of Card Membership, up to $200 back. Plus, earn $150 back after you spend $3,000 in purchases on the Card within the first 6 months of Card Membership. You will receive cash back in the form of statement credits. A $95 annual fee applies ($0 introductory annual fee for the first year).

Why this card is ideal for gift cards: Use this card for gift card purchases when you shop for groceries at U.S. supermarkets and you’ll earn 6 percent back up to annual limits. You can also earn 3 percent back on gift cards purchased from U.S. gas stations.

Chase Freedom Unlimited®: Best for drugstores

The Chase Freedom Unlimited® starts you off with a $200 cash bonus when you spend $500 within three months of account opening. You also earn at least 1.5 percent back on all purchases, 5 percent back on travel booked through Chase Ultimate Rewards, 5 percent back on Lyft purchases (through March 2022), 3 percent back on dining and drugstore purchases and 1 percent back on other purchases. No annual fee applies.

Why this card is ideal for gift cards: The Chase Freedom Unlimited lets you earn 3 percent back when you buy gift cards from drugstores.

Ink Business Cash® Credit Card: Best for businesses

Sign up for the Ink Business Cash® Credit Card to earn 5 percent back on up to $25,000 spent in combined purchases at office supply stores or on internet, cable and phone services each year, 2 percent cash back on the first $25,000 spent each year at gas stations and restaurants and 1 percent back on other purchases. You can also earn $750 in bonus cash back when you sign up and spend $7,500 within three months of account opening. This card doesn’t have an annual fee.

Why this card is ideal for gift cards: Use this card for gift card purchases made at office supply stores in order to earn 5 percent back on up to $25,000 spent each cardmember year.

Costco Anywhere Visa® Card by Citi: Best for gas stations

The Costco Anywhere Visa® Card by Citi doesn’t charge an annual fee, yet you’ll earn 4 percent back on the first $7,000 you spend on eligible gas purchases each year (then 1 percent back), 3 percent back on restaurants and eligible travel purchases, 2 percent back at Costco and on Costco.com and 1 percent back on other purchases. You do need to be a paid Costco member to qualify.

Why this card is ideal for gift cards: This card lets you earn 4 percent back on gift cards purchased at gas stations, up to annual limits. Costco.com and Costco stores also offer a broad selection of gift cards you could earn 2 percent back on, including gift cards offered at a discounted rate.

Target Redcard: Best for gift card discounts

The Target Redcard is available exclusively for purchases made at Target, which means it is rather limited. However, this card doesn’t have an annual fee, and you’ll get perks like 5 percent off everything you buy at Target and Target.com, free shipping on most items and exclusive offers and savings.

Why this card is ideal for gift cards: The Target Redcard also lets you save 5 percent off specialty gift cards for travel, restaurants, subscription services and more.

The bottom line

You can absolutely buy gift cards with a credit card instead of cash or debit, but you should only do so with a plan. If you buy gift cards with plastic and don’t pay your balance in full, for example, you’ll wind up paying credit card interest on your revolving balance each month. Not only that, but you should make sure any gift card purchase you’re planning won’t trigger a cash advance fee.

If you know the risks, you can earn considerable rewards when you buy gift cards with a credit card. That’s true whether you plan to use the gift cards yourself or you’re truly buying gift cards as a gift for someone else.

All information about The Amex EveryDay® Credit Card from American Express, Costco Anywhere Visa® Card by Citi and Target Redcard has been collected independently by Bankrate and has not been reviewed or approved by the issuer.

Written by
Holly D. Johnson
Author, Award-Winning Writer
Holly Johnson began her career working in the funeral industry, which may make you wonder why she works in personal finance now. Yet, the funeral industry taught the author everything she needs to know about the value of one's money and time. Johnson left the mortuary business a decade ago in order to explore her passion for personal finance and travel the world, and since then, she and her husband have built a debt-free lifestyle that has them on the path to retire very wealthy in their 40s. Holly's love of budgeting also led to the creation of her debt payoff book, “Zero Down Your Debt: Reclaim Your Income and Build a Life You’ll Love."