Can you buy gift cards with a credit card? – Forbes Advisor


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Gift cards are an easy gift for almost anyone. You may be considering getting gift cards as a nice surprise for friends and family or as a special treat for yourself. You might also consider putting those purchases on a credit card to earn rewards.

Can gift cards be purchased with a credit card? The short answer is yes, but. Gift card purchases can be paid for with credit cards in most cases, but you may not earn the rewards you expect.

Why might you want to buy gift cards with a credit card? Is this a good idea? We will discuss all of this below.

Reasons to buy gift cards with a credit card

Earn points on a gift

The most obvious reason you might want to buy a gift card with a credit card is to earn points or cash back on that gift card purchase. Most merchants who sell gift cards will allow you to pay for your gift card purchase with a credit card.

Develop a bonus category

Purchasing gift cards with a credit card can be a great way to “expand” a bonus category. If you’ve checked out our coverage of 5% rewards credit cards, you know that there are several credit cards offering 5% back or more at places like Walmart, Amazon, Target, office supply stores and Moreover. All of these places sell gift cards, and using a gift card at a merchant where you earn 5% can be a great way to increase the rewards you earn for purchases you otherwise make anyway.

For example, many office supply stores sell Starbucks gift cards. If you use a credit card to buy your Starbucks drink, you could earn 1-2% in rewards, but if you buy a Starbucks gift card at an office supply store, you could earn 5 Chase Ultimate Rewards® points per dollar by using the ink Business Cash® credit card to make the purchase since this card earns 5% cash back on the first $25,000 spent in combined purchases at office supply stores and internet services, cable and phone service each account anniversary year and 2% cash back on the first $25,000 spent on combined purchases at gas stations and restaurants each account anniversary year. Earn 1% cash back on all other purchases.

Take advantage of advance spending

Credit cards such as Chase Freedom Flex℠ and Discover it® Cash Back offer quarterly rotating bonus categories with enrollment in areas such as home improvement stores, grocery stores or gas stations. Sometimes the timing of these bonus categories doesn’t match your intended purchases or maybe you just aren’t spending enough in one of the promotional categories to maximize bonus rewards on $1,500 in purchases. Purchasing gift cards can be a reasonable way to maximize spending on future purchases and earn additional rewards.

Over the course of the year, I will surely spend at least $1,500 on groceries, so buying a grocery gift card during a quarter when my Discover it® Cash Back card offers 5% cash back on groceries means I can earn 5% effective cash back on a total of $1,500 of my grocery purchases. If you have a home improvement project planned in the future, purchasing a home improvement gift card when home improvement stores are a quarterly category bonus can lock in 5% cash back on those purchases. .

Purchasing gift cards for anticipated future spending can be especially useful with cards that offer category bonuses, but can also be used with cards like the Blue Cash Preferred® Card from American Express that have annual limits on bonus cash back categories.

Take advantage of promotions like Amex offers

Many cards offer periodic promotions, such as discount or increased cash back at specific merchants. If you have an American Express card, you’ve no doubt seen several Amex offers presented to you when you log into your account online, but other banks like Citi and Chase offer similar promotions. If you see one of these offers for a merchant you frequent, but don’t have an immediate purchase in mind, purchasing a gift card might be a good way to lock in one of these. these promotions.

For example, in April 2022, American Express is offering $10 off $60 at Macy’s on one of my Amex credit cards. If you’re targeted with an offer similar to this and use it to buy a gift card, you can get extra cash back on your future purchase at Macy’s, even if you don’t need it. immediate.

Another example, in April 2022, one of my Chase credit cards has a 10% cashback offer on purchases at Panera. If you normally eat at Panera, it might be beneficial to purchase a gift card using a similar promotional offer, locking in your discount on future spending at Panera.

Why you might not want to buy gift cards

So with all of these reasons to use a credit card to buy gift cards, why wouldn’t you want to buy as many gift cards as possible? There are a few reasons to be wise in your gift card purchases.

For starters, gift cards tie your money to a certain merchant. When you buy a gift card, you convert money, which can be used anywhere, into credit, which can only be used at a certain merchant. This means you have less flexibility in your purchases. If you buy gift cards speculatively, you might find yourself paying a higher price to buy something from a merchant in order to use a gift card. In the worst case scenario, if the store associated with a gift card you purchased goes bankrupt, you could end up paying for a plastic card that is no longer worth anything.

Second, gift cards do not enjoy the same consumer protections as credit cards, such as limited liability for fraudulent purchases. If someone fraudulently charges your credit card, chances are you won’t end up paying for that fraudulent charge. If someone nefarious charges your gift card for a purchase, you may have limited recourse. Additionally, using gift cards usually means you forfeit valuable benefits that might be offered by your credit card, such as return protection, purchase protection, or extended warranties.

Finally, one of the reasons merchants love gift cards is that they are prone to breakage. Simply, the case represents the number of gift cards purchased but never redeemed. If you buy gift cards, make sure you have a plan for tracking and using them.

Terms and conditions

Whether you purchase gift cards using your credit card to take advantage of a quarterly category bonus, a cashback bonus category, or a limited-time promotion like an Amex offer, be sure to read the terms and conditions. Many issuers exclude gift cards or “cash transactions” from earning rewards.

For example, the Chase Sapphire Preferred® card prohibits earning points on “cash transactions”. The American Express® Gold Card explicitly states that “qualifying purchases do NOT include…purchases of gift cards…or purchases of other cash equivalents”. All card rewards programs are subject to their specific terms and conditions, so make sure you understand the rules applicable to your credit card rewards program before purchasing gift cards.

Terms and application of terms vary by issuer and card. Most credit cards will earn rewards for normal levels of gift card purchases, but be aware that violating your credit card’s terms and conditions can result in severe penalties, including card closure and loss of earned rewards.


Purchasing gift cards with a credit card can be a rewarding way to increase your rewards on purchases you would otherwise make. Used strategically, gift card purchases can increase your cash back or transferable points rewards, but make sure you understand your card terms and conditions before purchasing gift cards.


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