How to Buy Gift Cards With a Credit Card

It is generally possible to purchase gift cards using a credit card. Understanding the nuances is crucial for making informed financial decisions.

Types of Gift Cards and Purchase Availability

Gift cards primarily fall into two main categories: store-specific and general-purpose. Store-specific gift cards, also known as closed-loop cards, are issued by individual retailers like Amazon, Starbucks, or Target. These cards are for use only at the issuing merchant or its affiliated businesses. Purchasing them directly from the retailer or authorized resellers with a credit card is usually straightforward.

General-purpose gift cards, or open-loop cards, are branded by major payment networks such as Visa, Mastercard, and American Express. These cards function similarly to debit cards, usable at a wide array of merchants. You can commonly find these at grocery stores, drugstores, and various online gift card marketplaces. Their widespread acceptance offers greater flexibility.

Financial Considerations for Credit Card Purchases

Understanding the financial implications of purchasing gift cards with a credit card is important. General-purpose gift cards often incur activation or purchase fees, typically ranging from $2.95 to $6.95. In contrast, store-specific gift cards rarely have these activation fees when acquired directly from the issuing retailer.

Credit card companies classify gift card purchases differently. Most credit card issuers categorize gift card transactions as regular retail purchases, not cash advances. However, some financial institutions might flag very large or frequent gift card purchases, potentially leading to a cash advance fee or a fraud alert. Cash advances incur higher interest rates and typically do not have a grace period. Review your credit card agreement or contact customer service to clarify their policy, especially for substantial purchases.

Using a credit card for gift card purchases can enable consumers to earn rewards, such as points, cashback, or miles. This benefit applies if the purchase falls into eligible spending categories, allowing individuals to maximize their credit card’s rewards program. However, some credit card issuers may exclude gift card purchases from earning rewards, or they may consider them cash-like transactions, so check your card’s terms and conditions.

Completing the Gift Card Purchase

Acquiring gift cards with a credit card is generally straightforward, whether online or in a physical store. For online purchases, you select the desired gift card and add it to your digital shopping cart. Proceeding to checkout involves entering your credit card details, including the card number, expiration date, and CVV, along with your billing address. After a successful transaction, you typically receive a confirmation email, and digital gift cards are delivered electronically.

When purchasing in a physical store, you select the gift card from the display and present it at the register. The cashier will prompt you to swipe, insert, or tap your credit card to complete the payment. It is important to confirm the transaction details on the receipt for accuracy before leaving the store. After purchase, some gift cards, particularly general-purpose ones, may require activation via a website or phone number before they can be used. Securely storing the gift card and any associated activation details is also recommended.