Gift cards are a convenient and popular choice for giving gifts, offering flexibility for the recipient. But what about using a credit card to purchase gift cards? Many people wonder if this is possible and whether it’s a smart move financially.
In this guide, we’ll explore whether you can buy gift cards with a credit card, the potential benefits, and any important considerations you should keep in mind.
Yes, you can buy gift cards with a credit card
The short answer is yes—you can typically buy gift cards with a credit card at most retailers, both in-store and online. Whether you’re purchasing a retailer-specific gift card, a Visa or Mastercard gift card, or an e-gift card, using a credit card as your payment method is generally allowed.
Pro Tip: Always check the terms and conditions of the retailer, as some may have restrictions on the amount you can purchase using a credit card.
Potential benefits of buying gift cards with a credit card
Using your credit card to buy gift cards comes with a few advantages. First, it’s convenient, allowing you to make purchases without needing cash or other payment methods. Additionally, if your credit card offers rewards like cashback, points, or miles, you can benefit from these perks by purchasing gift cards.
Why It’s Smart: If you’re already planning to buy a gift card for someone, using a rewards credit card can help you earn extra points or cashback on your purchase.
Be aware of credit card fees
While most credit card purchases for gift cards don’t incur additional fees, some gift cards, especially prepaid cards like Visa or Mastercard gift cards, may come with activation fees. These fees are typically a flat rate and can reduce the overall value of the gift card.
Pro Tip: Always compare the fees associated with prepaid cards versus retailer-specific gift cards to ensure you’re getting the best deal.
Does buying gift cards with a credit card count as a cash advance?
One important consideration is that some credit card issuers may treat the purchase of certain types of gift cards—especially prepaid or reloadable cards—as a cash advance. Cash advances typically come with higher interest rates and may incur additional fees, which could make the purchase more expensive.
What to Check: Before buying a gift card with your credit card, review your card’s terms to see if such transactions are classified as cash advances. If they are, it may be better to avoid using your credit card for this purpose.
Using gift cards for everyday purchases
Gift cards can be a smart tool for budgeting or saving. For example, buying a gift card for a store you frequently shop at can help you control spending, especially if you’re trying to stick to a budget. By using a gift card, you can avoid overspending and ensure that your purchase fits within your pre-set limits.
Pro Tip: If your credit card offers bonuses for spending at certain types of retailers, using it to buy gift cards for those stores can maximize your rewards.
Security concerns when buying gift cards online
If you’re purchasing gift cards online using your credit card, it’s important to be aware of potential security issues. Always make sure to buy from reputable retailers or directly from the company’s website. Avoid third-party sellers or unauthorized websites that may sell fraudulent or expired cards.
Why It’s Important: Buying gift cards from questionable sources can lead to issues like receiving a card with a lower balance or one that doesn’t work at all.
Can you earn rewards for gift card purchases?
Yes, in many cases, you can earn rewards for buying gift cards with a credit card. If your card offers rewards like points, cashback, or miles, the purchase of a gift card should count toward these bonuses. However, keep in mind that some credit card issuers may exclude gift card purchases from qualifying for certain promotional rewards, especially if they are linked to specific categories like groceries or gas.
Tip: Double-check the fine print of any reward program to see if gift card purchases are included. This ensures you’re making the most of your credit card benefits.
Yes, you can buy gift cards with a credit card, but it’s important to be aware of potential fees, cash advance classifications, and security risks.
By understanding these factors and using your credit card strategically, you can enjoy the convenience of gift cards while also earning rewards or managing your spending effectively.
Always make sure to check with your credit card issuer and retailer to avoid any surprises during the purchasing process.