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Can You Buy Gift Cards with a Credit Card?

Published June 8, 2023
3 min read

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Key points about: buying a gift card with a credit card

  1. You can buy most gift cards with a credit card, but some stores don’t allow you to make a gift card purchase with a credit card.

  2. Some gift cards charge an inactivity fee if they aren’t used for a year or more

  3. Bank-issued gift cards are more flexible than store gift cards, but cards from banks are more likely to charge a purchase fee.

Like any other purchase, buying gift cards is more convenient when you use a credit card. You don’t have to carry cash or write a check, and you may earn credit card rewards. But are there drawbacks to buying gift cards with credit cards? And does it matter what type of gift card purchase you make?

Types of gift cards

While you can usually buy any type of gift card with a credit card, certain types of gift cards come with fees, so the amount you pay for the gift card may be more than the amount the recipient can purchase with the card.

Store cards

Some gift cards may only be used for purchases at the merchant who issued the card. Store cards might be good at only one store, or they might let you shop at partner brands. Store cards usually don’t charge purchase fees or an annual fee for non-use, so the amount you pay is the same as the balance on the gift card. There are some stores that won’t let you purchase a gift card with a credit card, but most allow it.

Bank-issued gift cards

Gift cards from a bank are more flexible than store cards because you can use them to shop anywhere that accepts the card issuer’s credit cards. However, bank-issued cards may come with fees. The Consumer Financial Protection bureau explains the limitations on what fees gift card issuers may charge.

Is a prepaid card the same as a gift card?

While a prepaid card lets you shop in a variety of places like a bank-issue gift card does, a prepaid card may have additional fees. One advantage of a prepaid card is that you can add funds like you would on a debit card, and another is that you can withdraw cash from an ATM.

How to buy gift cards with a credit card

Most merchants sell gift cards online or in person, and you can pay for them with a credit card in the same way you would complete any purchase. Buying in person usually means you get a physical gift card, and buying online often gives the choice of either a physical gift card or a virtual card, which means you get a code that the recipient can use to complete a purchase.

Redeeming credit card rewards for gift cards

Some credit cards allow you to redeem cash back rewards for gift cards. In some cases, there may be promotions where you get added reward value when redeeming cash back for a gift card.

Did you know?

Discover cash back rewards cards let you redeem your cashback bonus for gift cards at select merchants, and there is a minimum 5% added value. This means that redeeming $50 in rewards can get you a gift card worth $52.50. Some of the gift cards offered may have promotions with up to 20% added value, which means that redeeming $50 in rewards would get you a gift card worth $60.

Learn more about Discover Cash Back Credit Cards

Choosing the best credit card for purchasing gift cards

If you’re choosing a new credit card, you’ll want to look at the terms, such as whether the card has an annual fee, whether there is a cash back rewards program, and the APR, which tells you the interest rate you’ll pay on purchases if you don’t pay your balance in full by the due date. To maximize your rewards and redemption value, check whether the card has a higher level of rewards at places you often shop, such as grocery stores or gas stations.

Don’t fall for a gift card scam

The Federal Trade Commission cautions that if  someone tries to sell you something and insists you pay them with a gift card, it’s likely to be a scam. Most merchants accept other forms of payment besides gift cards. Scammers may also claim that there’s an urgent need for you to pay with a gift card. One common claim scammers make is that you owe a fine to the government and you need to pay with a gift card. You can tell this is a scam because the government never asks for gift cards as payment for a fine.

Purchasing gift cards with a credit card can let you earn credit card rewards, but putting multiple gift cards on your credit card at once may raise suspicions of gift card fraud . As the New Jersey Department of consumer affairs explains, retailers train employees to suspect gift card fraud when someone purchases multiple gift cards at once. Running up a high balance on your credit card can also lower your credit score by making your credit utilization ratio higher, so you may want to consider paying off the balance as soon as possible.

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