Can You Buy Gift Cards With a Credit Card?

In the retail industry, gift cards can be closed-loop and only apply to purchases for one retailer, or open-loop cards that can be used virtually anywhere.³ For example, open-loop American Express Gift Cards don’t expire and can be used online or in-store anywhere that takes American Express. Both closed and open-loop gift cards may be purchased with a credit card, but each retailer has its guidelines.

You may incur small fees when purchasing an open-loop gift card from some establishments.⁴ Other card issuers may consider a gift card as a cash advance and apply extra fees and higher interest rates.⁵ Some merchants that accept credit cards could ask you to show a photo identification (ID) beforehand, while other stores require debit or cash.

Beyond that, merchant policies on gift card purchases may vary widely, and the terms and conditions may be tough to find. So, thinking through where your intended recipient shops and the brands they like might help you zero in on a closed-loop gift card to buy with your credit card.

There are benefits and downsides to buying gift cards with your credit card.
 

Here’s a look at some of the benefits now:

• You can clarify doubts with customer service.
  Fortunately, extra costs don’t have to catch you off guard. Issuers may list a phone number on the back of your card or their website so you can confirm service fees, report fraudulent activity, dispute a credit card charge, and check your balances and payments.
• You may be eligible for rewards.
  While not applicable in all cases, buying gift cards could help you earn card rewards.⁶ Reward Cards used to buy gift cards may provide cash back, statement credits, reduced hotel costs, miles for travel, or points that you can use to offset certain purchases. You might also qualify for rewards if your gift card falls within certain categories, like home improvement goods or restaurants.⁷

• Gift cards can last a while.
  Your gift card is typically good for 5 years at minimum after being activated, but some states give you even more time to use the funds.⁸ However, if you don’t use the gift card within 12 months, the issuer may charge you a fee if their policy allows them.⁹

The potential downsides to purchasing gift cards with a credit card may boil down to spending time to find the right fit and staying secure when making purchases.
 

Here are some of those downsides explained:

• Buying may require research.
  Depending on the retailer or card issuer, you may need to navigate multiple guidelines, restrictions, and fees to purchase a gift card with credit. You might also have to take time to confirm conditions both online and in any paperwork that could come with the gift card.
• Fraud prevention measures may kick in.
  While buying a few gift cards could get you closer to a minimum purchase threshold for credit card promotions, spending hundreds of dollars on gift cards may raise a red flag to your card provider. Like all financial actions, it’s best to proceed cautiously when buying gift cards, especially if your credit could retract rewards or even freeze your account if they suspect suspicious activity.
• Yes, gift card scams exist.
  Fraudsters could try to take gift card funds from you because the payment method is harder to trace, and consumers have fewer resources to combat gift card theft and scams. These roadblocks could make refunds, chargebacks, or reversals for unauthorized gift card transactions difficult to secure.