Key Highlights
Here are the key things to remember when buying gift cards with your credit card:
- Most major retailers, including supermarkets and online stores, allow you to purchase a gift card with a credit card.
- Using a credit card for these purchases can help you earn valuable credit card rewards like points or cashback.
- Be aware that some credit card issuers may treat a gift card purchase as a cash advance, leading to high cash advance fees.
- Certain gift cards, particularly network gift cards like Visa or Mastercard, come with activation or service fees.
- Some retailers might have store-specific policies, such as limits on the purchase amount.
Understanding Gift Card Purchases with Credit Cards
Have you ever wondered if you can use your credit card to buy a gift card? For the most part, the answer is yes. Most stores allow you to make a gift card purchase just like any other item. This applies to both retail gift cards, which are for a specific store, and network cards from issuers like Visa or Mastercard. However, it’s essential to be cautious, as some retailers may impose fees or restrictions on using credit cards for gift card purchases. Additionally, while charging a gift card can be convenient, it’s important to consider the implications of large expenses, such as buying a car with credit card, which could affect your credit utilization and interest rates. Always check with your credit card provider and the store policies to ensure a smooth transaction.
However, your ability to do so can sometimes depend on the policies of the retailer and your credit card issuer. Before you head to the checkout, it’s a good idea to understand the different types of gift cards available and how the transaction works.
How Credit Cards Are Used for Gift Card Transactions
Using your credit card for a gift card is typically a straightforward process. When you’re ready to pay, you simply present your credit card, and the cashier processes it as a standard purchase. Your card issuer then pays the merchant, and the purchase of gift cards is added to your credit card statement. This process is the same whether you’re buying in-store or entering your card details into an online cart.
There are two main types of cards you can buy: retail gift cards and network gift cards. A retail card is for a specific merchant, like Starbucks or Target. A network card, issued by companies like Visa or American Express, can be used almost anywhere that accepts that card network.
In most scenarios, your card issuer treats these transactions as regular purchases. However, it’s important to be aware of the rare cases where it might be coded differently, which could affect your rewards and fees.
Common Reasons Consumers Choose Credit Cards for Gift Cards
Why do so many people reach for their credit card to buy a gift card? Convenience is a major factor. Instead of carrying cash, you can easily complete your purchase online or in-store. Beyond ease of use, there are several strategic advantages to using your credit card.
Using plastic for your purchase allows you to spread out the cost over time, which can be helpful during expensive holiday seasons. Just remember to stay within your credit limit and pay the balance off to avoid interest. The biggest draw for many, however, is the opportunity to earn rewards.
Some of the top reasons include:
- Earning credit card rewards: Many cards offer points, miles, or cashback on every purchase, including gift cards.
- Maximizing bonus rewards: You can buy a gift card from a store in a bonus category (like a grocery store) to earn extra rewards.
- Qualifying for discounts: Some credit cards offer special discounts on gift card purchases at certain retailers.
Retailers That Allow Gift Card Purchases with Credit Cards
The good news is that you won’t have to look far to find a store that accepts credit cards for gift card purchases. Dozens of major retailers welcome this payment method, making it easy to pick up a last-minute present or stock up for future spending. Whether you’re at the supermarket, a big-box store, or browsing your favorite online cart, using a credit card is usually an option.
While most retailers are on board, their specific policies can differ. Let’s explore where you can confidently use your credit card to buy the right gift card for any occasion.
Major Chain Stores and Supermarkets
Have you ever noticed the large gift card racks at your local grocery store or big-box retailer? These displays are a goldmine for gift-givers. Major retailers like Target, Walmart, and Kroger make it incredibly simple to complete a gift card purchase with your credit card. These stores offer a wide selection of both retail gift cards for restaurants and shops, as well as network cards.
Using your credit card at these locations can be a smart move, especially if your card offers bonus rewards on groceries or general retail spending. For instance, buying an Amazon gift card at a supermarket could earn you more points than buying it directly from Amazon, depending on your card’s reward structure.
Here’s a look at some major retailers that typically allow credit card payments for gift cards:
| Retailer Category | Examples |
|---|---|
| Supermarkets | Kroger, Safeway, Albertsons |
| Big-Box Stores | Target, Walmart |
| Wholesale Clubs | Costco, Sam’s Club (often with discounts) |
| Drugstores | CVS, Walgreens |
Online Retailers and Marketplaces
Shopping for gift cards online offers unmatched convenience. Marketplaces like Amazon.com and specialized sites such as Giftcards.com provide a huge variety of gift card options you can buy with a credit card right from your couch. This is perfect for last-minute gifts, as you can often choose to send a virtual card directly to the recipient’s email.
Is it safe to add a gift card to your online cart and check out with your credit card? Yes, as long as you stick to reputable websites. These platforms use secure payment processing to protect your card details.
Online marketplaces are great for:
- Finding a wide selection: Access gift cards from hundreds of different brands in one place.
- Customizing the amount: You can often set a specific dollar value for the gift card.
- Instant delivery: Send an e-gift card for immediate use, which is ideal for faraway friends and family.
Gas Stations, Pharmacies, and Specialty Shops
You don’t always have to go to a large store to buy a gift card with a credit card. Many smaller, convenient locations like gas stations, pharmacies, and specialty shops also stock a selection of cards. The next time you’re filling up your tank or picking up a prescription, you’ll likely find a rack of gift cards near the checkout counter.
These locations are perfect for grabbing a physical gift card on the go. While their selection might not be as vast as a supermarket’s, you can typically find popular options for restaurants, coffee shops, and even network gift cards like Visa or Mastercard.
Using your credit card at these spots works just like any other transaction. Pharmacies such as CVS and Walgreens or even your local gas station can be a quick and easy solution when you need a gift in a pinch.
Restrictions and Policies to Be Aware Of
While buying gift cards with a credit card is widely permitted, it’s not always a free-for-all. You might encounter certain restrictions or policies that can affect your purchase. These rules can come from two places: the store you’re buying from and your credit card issuer. A retailer might have store-specific limits, while your bank may have rules about earning rewards or how the transaction is classified.
Understanding these potential hurdles can help you avoid surprises at the register and ensure your purchase goes smoothly. Let’s look at some of the common limitations you should know about.
Store-Specific Limits and Exclusions
Why might a cashier tell you they can’t accept your credit card for a gift card? Some retailers implement their own rules to prevent fraud or manage inventory. These store-specific policies can vary widely, so it’s always a good idea to ask if you’re unsure.
For example, a store might require you to show an ID that matches the name on your credit card. Others might only accept cash or debit for the purchase of gift cards. This is more common at smaller, independent businesses than at major chains.
Here are a few common restrictions you might face:
- Purchase limits: Some retailers cap the dollar amount of gift cards you can buy with a credit card in a single day. Southwest Airlines, for instance, has a $1,000 daily limit.
- Exclusions on certain cards: A store may allow credit card purchases for their own retail gift cards but not for network cards like American Express gift cards.
- Payment method restrictions: In rare cases, a merchant might designate gift card sales as “cash or debit only.”
Credit Card Issuer Rules on Gift Card Purchases
It’s not just the store that sets the rules; your credit card issuer has policies too. Before you buy, it’s wise to review your cardmember agreement to see how gift card purchases are handled. Some issuers have specific exclusions that could make using your credit card less appealing.
For instance, some cards, like the Citi Double Cash® Card, explicitly state that you won’t earn rewards on gift card purchases. Other issuers, such as American Express, may not count these purchases toward the spending requirement for a new cardmember welcome bonus. If you’re trying to hit a spending target, this is a critical detail to know.
The most significant policy to watch for is how the purchase is classified. While uncommon, some card issuers, particularly for store-branded cards, may categorize gift card purchases as cash advances. This can lead to hefty fees and higher interest rates.
Fees and Charges Associated with Buying Gift Cards Using Credit Cards
Are there extra fees when purchasing a gift card with a credit card? Sometimes, yes. While the act of using your credit card itself doesn’t typically trigger a fee from your bank, the transaction can come with other costs. These extra fees can turn a simple gift into a more expensive purchase than you planned.
The two main types of charges to look out for are cash advance fees from your credit card issuer and service fees attached to the gift card itself. Knowing about these potential costs ahead of time can help you make a smarter purchasing decision.
Cash Advance Fees and Coding
One of the biggest potential drawbacks of using a credit card for gift cards is the risk of it being treated as a cash advance. This is an important distinction because cash advances are handled very differently from regular purchases. They come with a separate, often higher annual percentage rate (APR) and do not have a grace period, meaning interest charges start accruing immediately.
On top of the higher interest, you’ll also be hit with cash advance fees, which are typically a percentage of the transaction amount or a flat fee, whichever is greater. For example, some store-branded credit cards classify gift card purchases this way, instantly adding fees to your transaction.
This coding is determined by credit card networks and the merchant, so it’s not always easy to predict. If you’re concerned, check your card’s terms or consider a different payment method.
Potential Service and Activation Fees
Beyond fees from your credit card company, the gift card itself can come with extra fees. These are known as service fees, activation fees, or purchase fees, and they are added to the total cost at checkout. These charges are most common with open-loop network gift cards, such as those from Visa, Mastercard, or American Express.
These fees typically range from $2.95 to $5.95 per card, depending on the gift card amount. The purpose of this fee is to cover the costs of processing and managing the card, which can be used at millions of locations.
On the other hand, retail or merchant-specific gift cards rarely have these types of fees. When you buy a $50 gift card for a specific restaurant or store, you usually pay exactly $50. Always check the packaging or terms before you buy to see if any extra fees apply.
Rewards and Benefits of Buying Gift Cards Using Credit Cards
Despite the potential for fees and restrictions, there are compelling reasons to use your credit card for gift card purchases. The primary advantage is the ability to earn credit card rewards. Many rewards programs treat gift card transactions as eligible purchases, allowing you to rack up rewards points, miles, or cashback.
This strategy can help you get more value out of your everyday spending. Whether you’re aiming for a statement credit or saving up for a vacation, buying gift cards can be a simple way to boost your rewards balance. Let’s explore how you can earn rewards and take advantage of special offers.
Earning Points, Cashback, or Miles
Do you earn credit card rewards when you buy gift cards? In most cases, yes. When you use your credit card, the purchase is typically processed like any other retail transaction, making you eligible to earn points, cashback, or miles based on your card’s rewards structure. This is a simple yet effective way to accumulate rewards on money you plan to spend anyway.
For example, if your card offers 1.5% cashback on all purchases, buying a $100 gift card will earn you $1.50 back. While it may not seem like much on a single purchase, these earnings can add up over time, especially if you buy gift cards regularly for personal use or as presents.
You can then redeem these rewards for valuable perks like statement credits, travel, merchandise, or even more gift cards. Just be sure to check your card’s terms, as a few issuers exclude gift cards from their rewards programs.
Bonus Categories and Promotional Offers
To truly maximize your earnings, you can strategically purchase gift cards in specific categories where your credit card offers bonus rewards. Many credit cards provide accelerated rewards at places like grocery stores, gas stations, or office supply stores. Buying a gift card at one of these locations can earn you significantly more points.
For instance, if you have a Chase Freedom Unlimited® card that earns bonus rewards at drugstores, buying a gift card there is a smart move. Similarly, you could buy a gift card for your favorite restaurant at a grocery store to take advantage of a supermarket bonus category.
In addition to bonus categories, keep an eye out for other opportunities:
- Card-linked offers: Programs like Amex Offers and Chase Offers provide statement credits or bonus points for purchases at specific merchants.
- Promotional discounts: Some retailers, like Costco, occasionally sell retail and travel gift cards for less than their face value.
- Credit card discounts: Cards like the Target RedCard offer a direct discount (e.g., 5%) on specialty gift card purchases.
Frequently Asked Questions
Is it safe to use my credit card to buy gift cards online?
Yes, it is generally safe to use your credit card to buy gift cards online, provided you purchase from reputable retailers or official marketplaces like Amazon.com or Giftcards.com. For added security, you can opt for a virtual card, and always ensure the website is secure before entering your card details in the online cart.
Can I use my credit card to buy a gift card at most stores?
Yes, you can use a credit card to buy a gift card at most major retailers, including grocery stores, big-box chains, and online marketplaces. While widely accepted, some smaller shops or certain credit card issuers may have policies preventing it, so it’s always a good idea to check first.
Are there extra fees when purchasing a gift card with a credit card?
Sometimes. While your credit card issuer typically won’t add extra fees, some gift cards have their own purchase fees or service fees. These are common with network cards (like Visa or Mastercard). Rarely, a credit card issuer might treat the purchase as a cash advance, which comes with high fees.
Is a prepaid card the same as a gift card?
A prepaid card and a gift card are similar but not identical. A prepaid card, especially one from network cards like Visa or Mastercard, is a broader form of gift card that can be used almost anywhere. A standard retail gift card is typically restricted to a specific store or brand.