Can you buy gift cards with a credit card?

Gift cards can be a great present to give someone or even buy as a treat for yourself. And while you can use cash or debit cards to pay for them, there are several advantages to using credit cards to buy gift cards.

But before making your purchase with a credit card, here are some factors you should consider.  

Key takeaways

• You can buy gift cards with a credit card. Doing this could help you earn rewards and take advantage of discounts and promotions. 
• One major trade-off is losing payment flexibility, since you can only use gift cards with one retailer in many cases. 
• Read your credit card agreement before buying the gift card with a credit card. Some retailers and card issuers place restrictions on these purchases.

Buying a gift card with a credit card provides more than simple convenience:

One major benefit of using a credit card to buy gift cards is the potential to earn rewards. Each dollar you spend on gift cards might help you earn points, depending on the credit card you use and its rewards program. You can redeem rewards and points for things like flights, hotel stays, ride-sharing apps, merchandise and more. You may not get this perk if you’re buying gift cards with a debit card or cash.

Many credit cards offer cash-back rewards when you make eligible purchases. These types of credit cards typically provide a percentage of each purchase back as cash. Depending on the credit card’s cash-back program, you may have several redemption options. For example, you may be able to transfer the cash into your bank account, receive a statement credit or pay for purchases at certain retailers.

Some credit cards provide more points or higher cash-back rates on certain categories. For example, you might earn more rewards when you make purchases at grocery stores or gas stations. You can maximize these bonus categories by buying gift cards at retailers that fit the category description.

Some credit card issuers provide discounts on all purchases when you use the card at a specific retailer. Taking advantage of these discounts by buying gift cards can help you save money before you even use the card.

Many credit cards offer shopping portals or promotional discounts when you use the card at specified retailers within a certain time frame. You may see a promotion for a merchant you typically shop with, but you don’t have an immediate purchase in mind. But you can buy a gift card with that merchant using your credit card if you want to take advantage of the promotion.

Buying gift cards can also help you support small businesses. They receive the money now, and you can use the card at your leisure. You’ll first need to check whether the business accepts credit cards and whether they set any restrictions.

Here are some types of gift cards that you might buy with a credit card: 

• Retail gift cards: These allow you to shop at certain retailers, such as a grocery store chain or restaurant. If your credit card is running a promotion where you get a discount for shopping at a certain retailer, you may decide to buy gift cards for the store. This helps you save money on any purchase you make later.
• Network gift cards: Credit card networks Visa, Mastercard and American Express all sell gift cards with a prespecified balance. They’re more flexible than retail cards because they can be used at any retailer that accepts cards from the network. But you’ll typically pay a purchase fee on top of the card’s face value when purchasing these cards. Your credit card issuer may also place restrictions on these purchases.

Although buying gift cards with a credit card is possible, it also has potential drawbacks and risks: 

• Less flexibility. When you buy a gift card for a certain retailer, you lose spending flexibility because you may not be able to use the card at another merchant.
• You may not earn rewards. Some credit cards exclude gift cards and “cash equivalents” from earning rewards. If gift cards aren’t listed as an eligible purchase in your cardholder agreement, then you won’t earn rewards when buying gift cards with your credit card. 
• You might not use the gift card. There’s always the risk you’ll lose the gift card or forget you have it. In that case, the money you spent on the gift card could be wasted.
• Fewer consumer protections. Gift cards don’t offer some of the protections that automatically come with credit cards. For example, you generally won’t pay for fraudulent credit card purchases if you report them within a certain time frame. But if someone steals and uses your gift card, there might not be much you can do.
• Give up certain benefits. Gift cards usually don’t offer return protection, purchase protection or extended warranties. Credit cards, on the other hand, usually offer these benefits.

When you use a credit card to buy gift cards, they may count as cash advance charges. A cash advance allows you to borrow a certain amount of money against your credit card’s line of credit. Credit card issuers usually charge a fee for cash advances along with a different annual percentage rate (APR).

Before you buy a gift card, check your credit card’s rules to see how it will treat gift card purchases. Once you’re ready, there are two main ways to buy the gift card: in person or online.

At a store, you’ll choose your gift cards and take them to the register. Use your credit card to pay for the cards. If you’re buying the gift cards online, head to the website where you’ll buy the cards. Add the gift cards to your cart, then head to the checkout page. Choose “credit card” as your payment method, and type in your details. Then complete the online purchase.

Buying gift cards with a credit card can be a great way to earn extra rewards and take advantage of promotions. You’ll just need to first make sure your card issuer allows these types of purchases. And it’s worth checking to see whether you’ll earn rewards in the process.