Yes, you can buy gift cards with a credit card at most retailers
Most stores, restaurants, and online platforms let you pay for gift cards using a credit card. You can buy them in person at the register, online through a retailer's website, or sometimes through third-party gift card marketplaces. The transaction works like any other purchase — the retailer charges your credit card and gives you the gift card code or physical card.
However, some credit card issuers and retailers have specific rules about gift card purchases that can affect your rewards, your credit limit, or how the transaction is categorized. Understanding these rules before you buy prevents surprises on your statement or in your rewards account.
Key Takeaways
- Most credit cards treat gift card purchases as regular transactions, but some issuers categorize them differently for rewards purposes.
- Certain credit cards earn reduced rewards or no rewards on gift card purchases, so check your card's terms before buying.
- Some credit card issuers may flag large gift card purchases as unusual activity and temporarily block your card.
- Buying gift cards does not reduce your available credit limit the way a cash advance does, but the full purchase amount counts toward your balance.
- If you are buying gift cards to resell or trade, some retailers restrict this in their terms of service.
How gift card purchases appear on your credit card statement
When you buy a gift card with a credit card, the transaction shows up on your statement as a regular purchase from that retailer. If you buy a $50 Amazon gift card, your statement shows a $50 charge to Amazon. The full amount counts toward your credit utilization ratio — the percentage of your available credit you are using — just like any other purchase.
This is different from a cash advance, which has its own fee and interest rate. A gift card purchase is treated as a merchandise purchase, so you pay the same interest rate as your regular purchases if you carry a balance. The transaction also counts toward any spending thresholds on your card, such as minimum spend requirements for sign-up bonuses.
Rewards and cash back on gift card purchases
Most credit cards earn rewards on gift card purchases the same way they do on other retail purchases. If your card earns 2% cash back on all purchases, you earn 2% on a gift card. If it earns bonus rewards in specific categories like groceries or dining, a gift card from that merchant may earn the bonus rate.
However, some card issuers exclude gift cards from bonus categories or cap rewards on them. A card that advertises 5% cash back on restaurants might earn only 1% on restaurant gift cards, or the issuer might count gift cards as a separate category with lower rewards. Check your card's terms or call the issuer before buying a large gift card if you are counting on the rewards.
A small number of credit cards treat gift card purchases as cash advances, which means no rewards and a higher interest rate. This is rare, but it happens with some business cards or older card products. Your cardholder agreement or the issuer's website will state this if it applies to your card.
When your credit card issuer might block a gift card purchase
If you buy a gift card for an unusually large amount or make multiple gift card purchases in a short time, your credit card issuer may flag the transaction as potentially fraudulent. This is a fraud prevention measure, and it can result in your card being temporarily declined or frozen.
If this happens, call the phone number on the back of your card and confirm with the issuer that the purchase is legitimate. Once you verify, they will usually clear the transaction and allow it to go through. To avoid this, you can call your issuer before making a large gift card purchase and let them know it is coming.
Gift card purchase restrictions at retailers
Most retailers allow credit card purchases of gift cards with no restrictions. However, some stores limit how many gift cards you can buy at once or require a minimum purchase amount. A few retailers restrict gift card purchases to in-store only, though this is becoming less common.
Some retailers also prohibit buying gift cards for the purpose of reselling them or trading them on secondary markets. If you buy a gift card and then sell it on a third-party site, you may violate the retailer's terms of service, though enforcement is inconsistent. Check the retailer's gift card terms if you have questions about what you can do with the card after purchase.
Using a credit card to buy discounted gift cards
Third-party gift card marketplaces like Raise, CardCash, and Costco's gift card section sell gift cards at a discount — sometimes 5% to 20% below face value. You can pay for these discounted gift cards with a credit card just as you would at the original retailer. The discount applies to the gift card itself, not to your credit card rewards, so you still earn rewards on the purchase price you pay.
For example, if you buy a $100 restaurant gift card for $85 on a marketplace and your credit card earns 2% cash back, you earn $1.70 in rewards on the $85 purchase. The $15 discount you got on the gift card is separate from your credit card rewards.
What happens if you return or cancel a gift card purchase
If you buy a gift card with a credit card and then return it or request a refund, the retailer will credit the amount back to your credit card. This usually takes 3 to 5 business days, though some retailers process it faster. The refund appears as a credit on your statement, reducing your balance and your credit utilization.
If the gift card was purchased with a sign-up bonus or promotional rewards offer, returning it may affect whether you meet the minimum spend requirement. Check your card's terms to see whether returned purchases count toward the requirement.
Frequently Asked Questions
Does buying a gift card hurt my credit score?
Buying a gift card does not directly hurt your credit score, but it does increase your credit utilization ratio temporarily. If you are using a large portion of your available credit, this can lower your score slightly. Once you pay off the balance, your utilization drops and your score recovers.
Can I use a credit card to buy a gift card for another credit card?
No. Most credit card issuers and retailers do not allow you to buy a credit card gift card or prepaid card with another credit card. This is treated as a cash advance or prohibited transaction. You can usually only buy credit card gift cards with a debit card or bank transfer.
What if my credit card is declined when I try to buy a gift card?
A decline usually means your card has reached its limit, you have insufficient funds, or the issuer flagged the transaction as suspicious. Call your card issuer to find out which one it is. If it is fraud prevention, they can clear it immediately. If it is your limit or funds, you will need to pay down your balance or use a different card.
Do I earn rewards on gift cards bought as gifts for other people?
Yes. You earn rewards based on the amount you spend, regardless of who the gift card is for. If you buy a $100 gift card for someone else with a 2% cash back card, you earn $2 in rewards.
Can I buy a gift card with a 0% APR promotional offer?
Yes, a gift card purchase counts as a regular purchase and qualifies for any 0% promotional period on your card. If your card has 0% APR for 12 months on purchases, a gift card purchase is included in that offer. However, if you return the gift card, the refund may affect your promotional period may be able to access depending on your issuer's terms.