Can You Buy a Gift Card with a Credit Card? Everything You Need to Know
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Written by
Josephine Nesbit
Most retailers accept credit cards for gift card purchases; however, there are potential restrictions at specific stores or for certain types of cards. Some retailers limit the number of gift cards you can buy or the dollar amount when paying with a credit card.
For example, you can purchase gift cards with your credit card at Target, but you can only buy up to five gift cards per person per day, and there’s also a fee of $4, which increases with the gift card amount.
Store policies vary depending on the retailer, so make sure to check with the store about any restrictions on gift card purchases.
Can You Buy Visa Gift Cards with a Credit Card?
Yes, you can purchase Visa, Mastercard and American Express gift cards with credit cards. These cards are typically more flexible as you don’t have to use them at a specific merchant.
However, you may run into some issues, like higher fees for prepaid Visa gift cards ranging from $2.95 to $6.95, depending on the retailer. Some stores also limit or prohibit such transactions and only accept cash or debit for gift card purchases to prevent credit card fraud. These transactions are also less likely to earn credit card rewards and may trigger cash advance fees.
Benefits of Buying Gift Cards with a Credit Card
There are several possible benefits of buying gift cards with a credit card.
- Earn rewards points, cashback or miles: One of the biggest benefits of using a credit card to pay for gift cards is that you can earn credit rewards points, cashback and miles on purchases. Make sure to pick the right credit card for your gift card purchase, as some may only offer points or miles that you can use in a specific airline or hotel, while others allow you to earn cash back. You’ll also want to pay attention to where you get the gift cards, as some credit cards offer higher rewards in specific categories.
- Credit card protections on gift card purchases: If you purchase gift cards with your credit card, you may be covered by additional protections. While gift cards typically aren’t eligible for purchase protections, you could be covered by $0 fraud liability. For more details on zero fraud liability and other protections, check the terms and conditions of the credit card or reach out directly to your credit card issuer.
- Flexibility for bulk purchases or holiday shopping: Using a credit card gives you more flexibility for bulk purchases or holiday shopping. This allows you to put everything on a single card, including gift card purchases, which also makes budgeting easier.
Potential Drawbacks to Consider
There are also potential drawbacks to consider, including:
- Fees: There are fees associated with prepaid and reloadable gift cards, ranging from $2.95 to $6.95, depending on the retailer. This may not add up to much when purchasing a single gift card, but it could get expensive if you plan to purchase multiple gift cards.
- The transaction could code as a cash advance: There’s a risk that the purchase could trigger a cash advance fee if it’s treated as a cash-like transaction. In this situation, you could be charged a cash advance fee and a higher annual percentage rate (APR) on the gift card amount.
- Limitations on earning rewards: There may be limits on earning rewards for certain gift card purchases. For example, American Express gift cards are typically not eligible to earn credit card rewards. Purchasing multiple gift cards with a higher dollar amount could also raise some red flags. The card issuer may take back the rewards or even close the account. This is known as manufactured spending, which is the process of purchasing cash equivalents, like gift cards, without incurring the full cost of the purchase.
Best Practices for Using a Credit Card to Buy Gift Cards
Before buying gift cards with a credit card, check retailer and credit card issuer policies in advance. Credit card issuers are required to post the credit card agreements that they offer to the public on their websites, or you can call the store or credit card issuer directly. The Consumer Financial Protection Bureau (CFPB) also has a credit card agreement database that allows you to search for an agreement by the name of the issuer.
When researching policies, it’s a good idea to check whether the transaction will trigger cash advance fees. These fees can be costly, but you can avoid this cost by choosing the right card.
Be careful not to overspend and build debt when maximizing your rewards. You can avoid expensive interest charges by paying your balance in full each month. Otherwise, these costs could outweigh any rewards earned.
Where Can You Buy Gift Cards with a Credit Card?
You can purchase gift cards – merchant-brand or prepaid network cards – online or in stores, including grocery stores, pharmacies and big-box retailers.
Retailers like Amazon, Target, Walmart, CVS, Walgreens and Staples typically have no restrictions on credit card purchases for gift cards. You can even buy digital gift cards through Paypal at a number of online retailers or purchase physical gift cards, electronic gift cards or digital gift cards on Amazon.com.
Retailer Restrictions to Know About
There may be restrictions on buying gift cards with your credit card. Retailer-specific rules could limit large or bulk gift card purchases or the gift card amount.
Some stores may also require ID to complete the transaction, and others may not allow the use of credit cards for gift card purchases at all. This is often done to prevent fraud and avoid credit card chargebacks.
The Bottom Line
You can use your credit card to purchase gift cards in stores or online. Using gift cards strategically for personal or gifting purposes offers convenience and allows you to earn rewards points, cashback or miles. Check the retailer’s policies and whether or not the purchase will trigger a cash advance fee. It’s also important to pay your credit card balance in full each month to avoid accumulating debt and interest.
Frequently Asked Questions
Here are the answers to some frequently asked questions about buying gift cards with a credit card.
Can I buy gift cards online with a credit card?
You can typically buy gift cards online with a credit card. Some retailers may have restrictions or terms regarding gift card purchases using a credit card, so check the store’s policies first.
Do credit card companies consider gift card purchases as cash advances?
Certain credit card companies consider gift card purchases as cash advances, but not all of them. In this case, the transaction will trigger a cash advance fee, and you could also be charged a higher APR.
Are gift card purchases eligible for rewards points?
Yes, gift card purchases may be eligible for rewards points. This also depends on the credit card company and the card’s reward program.
Can I return a gift card bought with a credit card?
Many companies don’t allow the return of gift cards unless it’s required by state law. If you can return the unused gift card, the retailer will typically offer a refund in the form of store credit or credit your credit card account for the return amount.
What should I do if I lose a gift card purchased with my credit card?
If you lose a gift card purchased with your credit card, contact the merchant or prepaid network card company. You will need to provide the card number and other identifying information, which you can find on the original receipt. If there’s still value on the card, you may be able to receive a refund of the available value in the form of another gift card.
