Can You Buy Gift Cards With a Credit Card? What You Need to Know
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You can usually buy gift cards with credit cards, but some stores may have restrictions. Depending on your credit card issuer, you may not earn rewards on these purchases.
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Yes, you can use credit cards to buy gift cards at most retailers that offer them. And you wouldn’t be alone if you did.
According to a Consumer Gift Card Preferences Study in 2018, 91% of consumers surveyed say they have purchased a gift card (not necessarily using a credit card), so it’s good to know the ins and outs of how gift cards work.
What to Know Before Buying Gift Cards
There are a few key things to note before you buy gift cards:
- While card issuers usually don’t have outright restrictions on purchasing gift cards, some stores may have specific guidelines.
“Some merchants may utilize other safeguards for large gift card purchases — like requesting a photo ID to ensure credit card payment details match your ID,” shares Kim Sobasky of the Retail Gift Card Association (RGCA).
Additionally, some specific locations may have their own restrictions on buying gift cards, so just ask if they can be purchased with a credit card. You may want to have a backup plan (like being able to get cash from a nearby ATM through a debit card) in case a specific store won’t let you use a credit card for the purchase.
- Buying gift cards may not yield any points or cash back on your rewards credit card.
Some credit card issuers have terms saying gift cards won’t earn rewards. In those cases it might actually work fine, with rewards being earned, but you’ll have no official ground to stand on if it doesn’t work or the issuer has a problem with it.
For example, the terms of the Blue Cash Preferred® Card from American Express (Review) say: “Eligible purchases [for rewards] do NOT include fees or interest charges, balance transfers, cash advances, purchases of travelers checks, purchases or reloading of prepaid cards, purchases of gift card, person-to-person payments, or purchases of other cash equivalents.”
However, our team has used the Blue Cash Preferred Card to buy gift cards at certain grocery stores (like Wegmans) with no problem, and earned rewards. So, your best bet is just to test it out (but you may want to try smaller amounts first).
- Some issuers may count gift card purchases as cash advances.
In some cases (which are probably rare), certain issuers may count gift card purchases or reloads as cash advances, rather than typical purchases. The same could be true for prepaid debit cards. This would not be ideal.
Cash advances don’t earn rewards, and they’ll start accruing interest immediately at a very high rate. You should be sure that any large gift card transactions will count as regular purchases with the specific merchant and card you’re using, rather than cash advances. Like the previous item, you can do this easily with a small test purchase.Read more What Is a Cash Advance? A Definition and Why You Should Avoid Them
Different Types of Gift Cards
There are two main kinds of gift cards:
- Retail or store-specific gift cards
- Generic gift cards
Retail or Store-Specific Gift Cards
These are also known in the card industry as “closed-loop” gift cards, and can only be used at their specific store or store chain.
Pro: Usually there are no fees associated with these cards.
Cons: You can only use these gift cards with their branded merchants, so you’ll want to make sure the recipient will shop at the relevant stores before giving it. Also, you’ll lose the value on the card if the store goes out of business (though usually there will be a notice to make sure you use up the balance).
If you want to give a gift card that offers more options without paying fees, you can find cards that include several brands like Darden Restaurants (Longhorn, Olive Garden, Yard House, and more) and Gap (Athleta, Banana Republic, Gap, Old Navy). Plus, who doesn’t love an Amazon gift card? (Read more on Amazon gift cards later in this article.)
Generic Gift Cards
Generic, general, or “open-loop” gift cards can be used anywhere the card’s network is accepted. You can get generic gift cards for all the major card networks.
If a merchant accepts American Express credit cards, for example, it will also accept Amex gift cards. The same is true for the other networks.
Examples of these gift cards include:
- Visa gift cards
- Mastercard gift cards
- American Express gift cards (personal and business versions)
- Discover gift cards
- Vanilla gift cards of several varieties:
- Vanilla Visa gift cards
- Vanilla Mastercard gift cards
- Vanilla Discover gift cards
Pros: You can use these gift cards anywhere that accepts regular credit cards — as long as the card’s network is accepted. Just check to make sure the merchant accepts Visa, Mastercard, American Express, or Discover (whichever network logo is on your gift card). There are usually no usage fees for the person using the gift card.
Cons: There are fees associated with purchasing generic gift cards, usually $2.95–$6.95, depending on the issuer and the denomination. Higher value gift cards from Visa and Mastercard have higher fees, while Amex has a flat fee of $3.95. Note that individual retailers or websites may have varying fees.
Generic gift cards are a bit like prepaid debit cards, but gift cards usually can’t be used to withdraw money at ATMs.
What Type of Gift Card Should I Buy?
Most experts in the space recommend that you buy gift cards without any fees associated with them, so usually that means getting store gift cards. Consumer advocate Clark Howard cites fees, a lack of ease of use (especially at restaurants and gas stations), and potential fraud as reasons he doesn’t recommend Visa gift cards (or rather any generic gift cards).
Any gift card is susceptible to theft or fraud, because, like cash, once it’s gone, it’s gone. Gift cards usually don’t offer fraud protection as most credit cards do, so make sure to keep them in a secure location (and find out how to protect yourself from fraud in the meantime).
Some gift cards, like those from Starbucks and Amazon, give you the option to load them onto your store account or combine them with an existing store gift card. If this is an option, do so immediately in order to claim the gift card funds as yours in case you lose or misplace the card.
Where Can I Buy Gift Cards?
In addition to buying gift cards at their specific stores (using a store’s co-branded credit card might even get you rewards on the gift cards), you can buy many different store and generic gift cards at:
- Grocery stores and supermarkets
- Superstores and warehouse clubs
- Convenience stores
- Gas stations
Some popular retailers for gift cards include:
- Online gift card websites like GiftCards.com
There are many online gift card sites, so just make sure you do your homework and use a legitimate company to buy yours.
Warehouse clubs like Costco sometimes offer gift card deals for select stores and restaurants, providing extra value for what you spend. For example, you can often get $100 worth of gift cards for $79.99. You can buy them online or at physical Costco stores (options will vary by location).
Additionally, there are sites like Cardpool.com where you can buy and sell unused gift cards. You’ll usually get a deal on gift cards when buying. You won’t make the full value when selling, but if you’re not going to use a card you can at least get something for it.
Did you know? Consumers spend more than $130 billion on gift cards per year, according to advisory company CEB TowerGroup, but roughly $1 billion of that goes unspent.
Getting More Rewards When Buying Gift Cards
While you may not be guaranteed rewards when buying gift cards (as mentioned previously, depending on the credit card’s terms), in most cases it will likely work out fine. Here are some of the best credit cards for buying gift cards, offering rewards at common gift card sources:
- American Express® Gold Card (Review): 4X points at U.S. supermarkets (up to $25,000 per calendar year in purchases, then 1X), and 4X points at restaurants, 4x points at Uber Eats
- Blue Cash Preferred® Card from American Express (Review): 6% cash back at U.S. supermarkets (up to $6,000 per year, then 1%), 3% back at U.S. gas stations
- Blue Cash Everyday® Card from American Express (Review): 3% cash back at U.S. supermarkets (up to $6,000 per year, then 1%), 2% back at U.S. gas stations
- Chase Freedom Flex℠ (Review): 5% rewards rotate quarterly; may include grocery stores, gas stations, drug stores, and Amazon (terms apply)
- Discover it® Cash Back (Review): 5% rewards rotate quarterly; may include grocery stores, gas stations, Amazon, Target, and Walmart (terms apply)
- Citi® Double Cash Card – 18 month BT offer (Review): 2% cash back everywhere you shop (1% back on purchases, 1% back on payments as long as you pay at least the minimum due on time)
Airline Gift Cards and Manufactured Spend
Airline Gift Cards
Some credit cards offer travel credits for travel-related purchases, and most major airlines offer gift cards. So, will those travel credits count for airline gift card purchases?
While these may be welcome gifts, in general you shouldn’t expect travel credits to count toward the purchase of airline gift cards. In the past this has worked with a variety of airlines, but the travel hacking community has found these opportunities to be drying up. It may still be possible for certain cards and airlines, but in general this strategy isn’t viable anymore.
Some of the ambiguity may come from how purchases are processed. Different airlines may code purchases in different ways, for example, and different issuers may have different policies when it comes to travel credits. And then there’s the question of how transactions are made: Mobile payments may be coded differently than those made from desktops and laptops, or in person.
When looking to use travel credits on credit cards, your best bet is just to make purchases that will definitely count. The eligible purchase types will depend on your particular travel card, but they could include flight tickets, hotel bookings, and car rentals, along with incidentals like seat upgrades, in-flight food, change fees, or bag fees.
There’s also a concept called “manufactured spend,” which, in a very general form, entails using a credit card to purchase prepaid Visa, Mastercard, or American Express gift cards, or other cash equivalents, earning rewards in the process. Then the product is liquidated back into cash through some method, leaving behind the rewards.
We don’t recommend manufactured spending because it’s elaborate, takes ample time, and, most importantly, it often violates the terms of your credit card agreement. You can find interesting stories from people who have attempted this, but credit card issuers have been cracking down on the practice.
So, it’s something you do at your own risk since your accounts could be shut down. You’ll likely be better off maintaining a healthy relationship with your card issuers.
Why Couldn’t I Buy Gift Cards With a Credit Card Before?
If you feel like you hit a snag buying a gift card with a credit card in the past, that’s entirely possible. Before EMV chips, many stores had restrictions on buying gift cards with credit cards because there was a higher fraud risk.
EMV Cards, Fraud, and Gift Cards
Sobasky explains, “In 2016, some merchants that were not yet EMV-compliant created self-imposed restrictions to limit fraud by requiring cash for gift card purchases or restricting credit card usage when buying gift cards.”
“Generally speaking, merchants that are EMV-compliant no longer set limits around the use of credit cards to buy gift cards,” she adds. EMV chips are now on nearly all credit cards issued in the U.S. According to PYMNTS, “Merchants who have upgraded to chip technology saw a decrease of 80 percent in counterfeit fraud dollars in September of 2018 when compared to September of 2015. Also, total counterfeit fraud dollars went down by 48 percent.”
Sobasky also notes, “Any payment restrictions (occurring primarily in 2016) haven’t had a long-term impact on gift card purchases. Gift cards have been the most requested gift in America for 12 years running, based on data from the National Retail Federation.”
Gift Cards: The Rules and Fine Print
Prior to purchasing a gift card, the U.S. Department of the Treasury recommends that you read the product disclosures to understand the important terms and conditions of the account.
Some key items it suggests considering include:
- Any fees that apply during or after the sale that reduce the value of the card
- What to do if the card is lost or stolen
- What to do if there are problems with the card
- Where the card can be used
- How to claim any unused portion of the card
To protect consumers, U.S. regulations require that all fees be disclosed on the gift card itself or on its packaging. If the gift card has an expiration date, the date must be at least five years after the gift card was issued. Many states also have more stringent rules and some require that gift cards don’t expire. (Read more about state regulations on gift cards.)
It’s also a good idea to keep the receipt with the gift card in order to ensure the card can be used (I once received a gift card that didn’t have any money on it, so the gift giver returned it with the receipt for a new one).
The Bottom Line
There aren’t many restrictions on buying gift cards with credit cards — usually you’ll be in the clear.
So, if you’re in a gift-giving mood, your main focus should probably be making sure the recipient will actually shop at the store in question (for retail gift cards). If you’re buying online, make sure you’re using a legitimate site.
Gift cards are popular gifts but don’t usually offer any protection against identity theft or fraud like credit cards, so you’ll want to keep them extra safe. Consider using or giving digital gift cards when possible to help avoid problems.
Frequently Asked Questions
Where can I buy Amazon gift cards?
You can buy Amazon gift cards in $15, $25, $50, and $100 denominations at participating grocery, drug, and convenience stores throughout the U.S. At select stores you can also choose a variable denomination card, which can be loaded with any amount between $25 and $500. See a full list of retailers who sell Amazon gift cards here.
You can also buy Amazon gift cards on Amazon.com with any credit card. You can fund your own account balance, or send digital gift cards to others via email or text. Physical gift cards can be sent through direct mail. And here’s a quick tip — avid Amazon shoppers can use an Amazon credit card to secure a great reward rate on gift cards purchased directly from Amazon itself.
A good way to keep a credit card active is to load $1–$2 on an Amazon gift card for your Amazon account, once every three to six months or so.
Where can I buy Target/Walmart gift cards with credit cards?
Target and Walmart gift cards can be purchased from the stores themselves, or from their respective websites. Both chains accept credit cards online and in-store, as do most major retailers (while we’re on the topic, both Target and Walmart offer relatively solid retail credit cards if you shop there often).
If you’re buying online, ordering gift cards directly from the retailer is probably your best choice, because you should only have to pay the price of the gift card, and that’s that. Third-party sites selling these gift cards may try to mark them up. However, you may have some luck on sites like Cardpool.com, where users can buy and sell unused gift cards.
How can you avoid gift card scams?
The Federal Trade Commission (FTC) warns of gift card scammers who try to convince you to pay bills with gift cards (or even pretend to be the IRS requesting them). No legitimate organization will ever request payment through gift cards, so if you get a call asking you to do that just hang up immediately. You also shouldn’t share your gift card information or PIN with anyone unless you’re using it at a retailer or restaurant for a transaction.
If you’ve already fallen victim to one of these scammers (and they’re really good at fooling people!) you can contact the FTC to report it.
Additional Resources on Gift Card Scams
- Amazon lists some common gift card scams to look out for
- The RGCA offers some tips for safely using gift cards
- Cybercrime expert and author Bob Sullivan shares a story about gift card fraud and tips to avoid it
There are a lot of credit cards out there, and some are better for buying gift cards than others. Browse the Best Credit Cards to find the right card for you, whatever you may need it for.
For rates and fees of the American Express® Gold Card, please click here.
For rates and fees of the Blue Cash Preferred® Card from American Express, please click here.
For rates and fees of the Blue Cash Everyday® Card from American Express, please click here.
Ellen Sirull is a writer with over 15 years of experience, covering topics from personal finance to identity protection to credit and credit cards. Her work has been featured on CNBC, New York Daily News, Fox News, Yahoo! Finance, AOL Finance, Experian and the Identity Theft Resource Center. She enjoys spending time with her family and traveling as much as possible and is always thinking about how best to invest her own money for retirement and her family’s well-being.
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