Can You Buy Gift Cards with a Credit Card?

The short answer is yes – you can buy gift cards with a credit card at most retailers, both online and in physical stores. However, the process involves important considerations around fees, rewards earning potential, and issuer restrictions that can significantly impact your experience.

Understanding how to purchase gift cards strategically can help you earn credit card rewards while avoiding costly pitfalls like cash advance fees. With the U.S. gift card market projected to exceed $307 billion by 2029, knowing the ins and outs of credit card gift card purchases has never been more valuable.

This comprehensive guide covers everything you need to know about buying gift cards with credit cards, from maximizing rewards to avoiding common mistakes that could cost you money.

Quick Answer: Yes, You Can Buy Gift Cards with Credit Cards

Most major retailers accept credit cards for gift card purchases both in-store and through their online platforms. You’ll find two main categories available: store-specific gift cards that work only at designated retailers, and open-loop network cards from Visa, Mastercard, or American Express that function anywhere these networks are accepted.

Store gift cards typically have no purchase fees, making them an attractive option for earning credit card rewards. Network cards, however, usually charge activation or service fees ranging from $2.95 to $5.95, which can eat into any rewards you might earn.

The key advantage of using credit cards for gift card purchases is the potential to earn rewards points or cash back on these transactions. Many rewards credit cards treat gift card purchases as regular purchases, allowing you to accumulate points, miles, or cash back just as you would with any other transaction.

However, not all credit card issuers handle gift card purchases the same way. Some may exclude these transactions from bonus rewards categories, while others might code certain types of prepaid cards as cash advances, triggering expensive fees and higher interest rates.

For more detailed information on credit card rewards and how they apply to gift card purchases, you can visit NerdWallet’s guide on credit card rewards.

Types of Gift Cards You Can Buy with Credit Cards

Understanding the distinction between closed-loop and open-loop gift cards is crucial for making informed purchasing decisions. Each type comes with different fee structures, acceptance limitations, and potential credit card coding issues.

Retail Store Gift Cards

Closed-loop cards, also known as retail gift cards, work exclusively at specific merchants or restaurant chains. These include popular options like Amazon gift cards, Target gift cards, or Starbucks cards. They’re generally the safest choice when using credit cards because they’re almost always coded as regular purchases rather than cash advances.

Retail gift cards are available at grocery stores, pharmacies, big-box retailers, and wholesale clubs across the country. Most merchant-branded cards have no activation or service fees, making them ideal for maximizing credit card rewards without additional costs eating into your returns.

You can purchase these cards in-store from dedicated gift card racks or online through retailer websites. Popular options include Disney gift cards for theme park visits, Home Depot cards for home improvement projects, Best Buy for electronics purchases, and various restaurant chains for dining experiences.

These store gift cards offer excellent opportunities for strategic purchases. For example, buying Amazon gift cards at grocery stores allows you to earn supermarket category bonuses while essentially pre-funding your online shopping. Similarly, purchasing restaurant gift cards during promotional periods can provide additional value through bonus offers.

The main limitation of retail gift cards is their restricted acceptance. A Target gift card only works at Target locations and Target.com, which may not suit your needs if you prefer shopping flexibility. However, this restriction is often offset by the lack of fees and consistent rewards earning potential.

For more insights on retail cards and their benefits, check out The Balance’s explanation of store gift cards.

Open-Loop Network Gift Cards

Open-loop cards from major credit card networks offer broader flexibility but come with additional complexities. These prepaid network gift cards can be used anywhere the issuing network is accepted, making them essentially cash equivalents. This versatility makes them more likely to be flagged by credit card issuers as high-risk transactions.

Visa gift cards, Mastercard gift cards, and American Express gift cards function as prepaid cards accepted wherever these networks are recognized. Purchase fees typically range from $2.95 to $5.95 depending on the card’s value, with higher denominations sometimes carrying larger fees.

These prepaid network cards may also have inactivity fees after 12 months of non-use, making them less suitable for long-term storage of value. The fees associated with these cards can quickly erode any rewards earned from your credit card purchase, especially for smaller denominations.

More concerning is the increased likelihood that credit card issuers will code these purchases as cash advances rather than regular transactions. When this happens, you’ll face immediate interest charges at rates often exceeding 25%, plus cash advance fees of $10 or 5% of the transaction amount.

Despite these drawbacks, open loop gift cards serve specific purposes. They make excellent gifts when you’re unsure of the recipient’s preferred stores, and they can be useful for online purchases at merchants that don’t accept your preferred payment methods.

To understand how prepaid cards differ from gift cards, visit Consumer Financial Protection Bureau’s guide on prepaid cards.

Where to Buy Gift Cards with Credit Cards

The availability of gift card purchases with credit cards varies significantly across different retailers and platforms. Understanding where you can reliably use your credit card for these purchases helps you plan your rewards strategy effectively.

Physical Retail Locations

Walmart, Target, CVS, and Walgreens consistently accept credit cards for gift card purchases across their locations. These retailers stock extensive gift card selections, from single-merchant cards to multi-brand options that work across various restaurant chains or retail groups.

Costco and Sam’s Club offer unique advantages for members, frequently selling discounted gift cards that provide immediate savings beyond any credit card rewards. For example, you might find $100 worth of restaurant gift cards for $79.99, effectively giving you a 20% discount plus whatever rewards your credit card provides.

Some locations require ID verification matching your credit card name, particularly for high-value purchases. This anti-fraud measure helps protect both the retailer and cardholders from unauthorized transactions. Gift card racks in these stores provide variety, though many retailers impose purchase limits per transaction to manage fraud risk.

Gas stations like Shell, Exxon, and BP also typically accept credit cards for gift card purchases, though their selection is usually more limited. Office supply stores such as Staples and OfficeMax are particularly valuable for business credit card holders seeking to maximize category bonuses.

For a full list of major retailers that accept gift card purchases with credit cards, see Gift Card Granny’s retailer directory.

Online Marketplaces

Digital platforms like Giftcards.com, Amazon, and Target.com offer both digital and physical gift cards with electronic delivery options perfect for last-minute gifts. These platforms sometimes feature promo codes and discounts unavailable in physical stores, providing additional value opportunities.

Electronic delivery is particularly convenient for immediate gift-giving needs. You can purchase a digital gift card or virtual card and have it delivered via email within minutes, making it ideal for forgotten birthdays or spontaneous celebrations.

However, exercise caution with auction sites and discount gift card resellers. While these platforms may offer attractive pricing, they carry increased fraud risk. Stick to reputable, well-known retailers and official gift card websites to ensure you receive valid, properly activated cards.

Online purchases also provide better record-keeping for rewards tracking and expense management. Digital receipts and transaction histories make it easier to monitor your gift card spending and ensure you’re maximizing your credit card’s rewards program.

Benefits of Using Credit Cards for Gift Card Purchases

Strategic gift card purchases with rewards credit cards can significantly amplify your earning potential while providing additional consumer protections unavailable with cash or debit card transactions.

The primary advantage lies in earning rewards on money you’ll spend anyway. By purchasing gift cards for stores you frequent, you essentially pre-fund your shopping while earning points, miles, or cash back on the transaction.

Earning Rewards and Cash Back

Chase Freedom Flex cardholders can earn 5% cash back on rotating quarterly categories, which often include grocery stores where gift cards are sold. During grocery quarters, buying Amazon gift cards at supermarkets effectively gives you 5% back on your future Amazon purchases.

The Blue Cash Preferred from American Express earns 6% cash back at U.S. supermarkets on up to $6,000 in annual purchases. This makes grocery store gift card purchases extremely lucrative, especially when combined with store promotions offering bonus value.

Capital One Savor cardholders earn 4% on dining purchases, making restaurant gift card acquisitions particularly rewarding. Business credit card holders can leverage even higher rates, with cards like Chase Ink Business Cash offering 5% back at office supply stores that sell various gift cards.

Some credit cards offer special bonuses for specific retailers. For instance, certain co-branded cards provide extra points or cash back when purchasing their associated merchant’s gift cards, though these offers vary and may have restrictions.

Strategic Shopping Opportunities

Card-linked offers from programs like Amex Offers or Chase Offers can provide additional savings on top of base rewards. These targeted promotions might offer statement credits or bonus points for eligible purchases at specific retailers, including gift card transactions.

Timing your purchases during promotional periods maximizes value. Many retailers offer bonus incentives during holidays, such as “buy a $100 gift card, get a $10 bonus card” promotions. Combined with credit card rewards, these deals can provide substantial returns.

Store loyalty programs often stack with credit card rewards, allowing you to earn points or discounts from both the retailer and your card issuer simultaneously. This double-dipping strategy can significantly increase your total returns on gift card purchases.

Consider purchasing gift cards before major shopping events like Black Friday or back-to-school seasons. This strategy allows you to earn rewards immediately while securing funds for future promotional purchases, effectively getting paid to shop during sales events.

Potential Drawbacks and Restrictions

While buying gift cards with credit cards offers numerous advantages, several significant risks and limitations require careful consideration before making large or frequent purchases.

The most serious concern involves cash advance categorization, which can transform a potentially profitable transaction into an expensive mistake. Understanding these risks helps you avoid costly fees and interest charges that can far exceed any rewards earned.

Cash Advance Concerns

American Express gift cards frequently code as cash advances rather than purchases, immediately triggering interest charges and fees while providing no rewards. This coding issue makes these particular cards unsuitable for rewards maximization strategies.

Bank-issued prepaid cards pose similar risks, often resulting in cash advance fees of $10 or 5% of the transaction amount, whichever is greater. These fees apply immediately, regardless of whether you pay your balance in full each month.

Cash advances accrue interest immediately at rates typically ranging from 25% to 30% annually, with no grace period like regular purchases enjoy. Even if you pay the balance quickly, you’ll still owe interest from the transaction date, making these purchases extremely expensive.

Before purchasing any prepaid network gift cards, contact your credit card issuer to confirm how these transactions will be coded. This simple step can save you significant money and frustration by avoiding unexpected cash advance treatment.

Credit Card Issuer Restrictions

American Express excludes gift card purchases from rewards earning on most personal cards, though some business cards may still allow rewards on these transactions. This policy significantly reduces the value proposition of using Amex cards for gift card purchases.

Many issuers exclude gift card purchases from counting toward welcome bonus spending requirements. If you’re working toward a signup bonus, verify that gift card spending will qualify before relying on this strategy to meet minimum spending thresholds.

Excessive gift card purchasing may trigger account reviews or closures, particularly if the activity appears unusual compared to your normal spending patterns. Financial institutions monitor for potential manufactured spending schemes and may take action against accounts showing suspicious patterns.

Chase and Citi sometimes exclude certain gift card merchants from bonus category earnings, even when those merchants would otherwise qualify. These exclusions can change without notice, making it important to monitor your statements and ensure you’re earning expected rewards.

Smart Strategies for Buying Gift Cards

Maximizing the value of credit card gift card purchases requires strategic planning and attention to detail. These proven approaches help you optimize rewards while minimizing risks and fees.

Successful gift card strategies balance rewards earning with practical considerations like credit utilization, payment timing, and security practices. The goal is enhancing your overall financial picture rather than pursuing rewards at any cost.

Maximizing Value

• Keep your credit utilization below 30% when making large gift card purchases to maintain healthy credit scores. High utilization can temporarily lower your credit score, even if you pay the balance immediately after the statement closes.
• Pay off gift card purchases immediately to avoid interest charges that could negate any rewards earned. Set up automatic payments or calendar reminders to ensure timely payment, especially for large transactions that might significantly impact your monthly balance.
• Take advantage of retailer promotions offering bonus value, such as “buy $100 in gift cards, get $10 bonus” deals. These promotions effectively provide guaranteed returns that stack with your credit card rewards, creating compound value.
• Use grocery store credit cards when shopping at supermarkets that sell various gift cards. Cards specifically designed for grocery spending often provide the highest rewards rates for these locations, maximizing your return on gift card purchases.
• Consider timing large gift card purchases to coincide with quarterly bonus categories on cards like Chase Freedom or Discover it. These rotating categories can provide 5% cash back during specific periods, significantly boosting your rewards rate.

Avoiding Fees and Scams

• Never provide gift card numbers to unknown callers claiming government affiliation or demanding immediate payment. Legitimate government agencies never request payment via gift cards, and these requests are always fraudulent attempts to steal your money.
• Purchase gift cards only from reputable retailers and avoid discounted gift card reseller websites. While these platforms may offer attractive pricing, they often sell cards with unknown histories, potentially leaving you with worthless cards if issues arise.
• Carefully review gift card terms before purchasing, paying attention to expiration dates and maintenance fees. Some cards charge monthly fees after periods of inactivity, which can gradually reduce their value over time.
• Report suspected gift card scams to the Federal Trade Commission at reportfraud.ftc.gov. This helps authorities track fraud patterns and potentially recover funds for victims while protecting other consumers from similar schemes.

Alternative: Redeeming Credit Card Rewards for Gift Cards

Instead of purchasing gift cards directly, many credit card rewards programs allow you to redeem accumulated points or cash back for gift cards. This approach can sometimes provide better value than direct purchases, especially when programs offer bonus redemption rates.

Rewards redemption eliminates concerns about cash advance coding since you’re using points rather than charging purchases to your card. This method also doesn’t affect your credit utilization or require immediate payment like traditional purchases.

Popular Reward Redemption Programs

• Discover Cashback Bonus offers 5% extra value on gift card redemptions, meaning $20 in cash back becomes $21 when redeemed for gift cards. This bonus applies to redemptions starting at just $5, making it accessible for small rewards balances.
• Capital One rewards can be redeemed for Amazon gift cards at a consistent rate of 1 cent per point, matching the value of cash redemptions. This equivalency means you’re not sacrificing value by choosing gift cards over cash back.
• Chase Ultimate Rewards provides gift card options through their shopping portal with variable values depending on your card type. Premium cards like the Sapphire Reserve often offer better redemption rates than entry-level cards, making gift card redemptions more attractive for higher-tier cardholders.
• Bank of America rewards periodically offer promotional bonuses for gift card redemptions, sometimes providing 10-20% extra value during special periods. These limited-time offers can make gift card redemptions significantly more valuable than cash alternatives.

Consider the flexibility trade-off when choosing between cash and gift card redemptions. While cash provides unlimited spending options, gift cards may offer bonus value that compensates for their usage restrictions.

Frequently Asked Questions

Understanding common concerns about gift card purchases helps clarify the practical aspects of using credit cards for these transactions. These frequently asked questions address the most important considerations for consumers.

Purchase Limits and Requirements

Most retailers limit gift card purchases to between $500 and $2,000 per transaction to manage fraud risk. These limits apply regardless of payment method, though some stores may have lower limits specifically for credit card purchases.

Walmart limits total daily gift card purchases to $3,000 when using credit cards, though this limit may be lower for certain types of prepaid cards. Individual transaction limits typically range from $500 to $1,000, requiring multiple transactions for larger amounts.

Many stores require photo ID verification for gift card purchases exceeding $300, particularly for prepaid network cards. This requirement helps prevent fraud and money laundering while ensuring the purchaser matches the credit card being used.

Financial institutions may impose monthly limits on cash-equivalent purchases, including certain types of gift cards. These limits vary by issuer and account history, with some banks allowing higher limits for established customers with good payment records.

Can I earn rewards on all gift card purchases?

Rewards earning depends on your credit card issuer and the specific type of gift card purchased. Store-specific gift cards typically earn rewards, while prepaid network cards may not, especially with American Express cards.

Are there extra fees for buying gift cards with credit cards?

The credit card transaction itself usually doesn’t incur fees, but the gift cards may have activation or service fees. Store gift cards typically have no fees, while Visa, Mastercard, and American Express gift cards charge $2.95 to $5.95 in activation fees.

Will gift card purchases count toward signup bonuses?

This varies by issuer. Many credit card companies exclude gift card purchases from signup bonus eligibility, so check your card’s terms before relying on gift card spending to meet minimum spending requirements.

Can I return unused gift cards?

Return policies vary by retailer and card type. Most stores don’t allow returns of gift cards once purchased, though some may make exceptions within short timeframes. Always check the specific retailer’s policy before purchasing.

Do gift cards expire?

Federal law requires gift cards to remain valid for at least five years from purchase or last reload date. However, some cards may have inactivity or service fees after 12 months of non-use, particularly prepaid network cards.

Bottom Line

Buying gift cards with credit cards is not only possible but can be a smart financial strategy when executed thoughtfully. The key is understanding the different types of cards available, where to purchase them, and how your credit card issuer treats these transactions.

Store-specific gift cards offer the best combination of no fees and reliable rewards earning, making them ideal for strategic purchases at retailers you frequent. Network gift cards provide more flexibility but come with activation fees and higher risk of cash advance treatment.

Focus on retailers that consistently accept credit cards for gift card purchases, such as major grocery stores, pharmacies, and big-box retailers. These locations often provide the best selection while maximizing your rewards earning through category bonuses.

Always verify how your credit card issuer codes gift card transactions before making large purchases. This simple step prevents costly cash advance fees and ensures you earn expected rewards on your spending.

Consider gift card purchases as part of your broader rewards strategy rather than an end goal. The most successful approach involves buying cards for stores you’ll use anyway, during promotional periods that offer additional value, while staying within your normal spending patterns to avoid triggering issuer scrutiny.

Remember that the gift card market continues evolving, with issuers and retailers regularly updating their policies. Stay informed about changes that might affect your strategy, and always prioritize security by purchasing from reputable sources and protecting your card details from scammers.