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Can you buy gift cards with a credit card?

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  • You can buy gift cards using a credit card, but in rare cases you could run into an issue buying a store-issued gift card.
  • You could encounter a retailer that doesn’t accept credit cards, or that requires additional ID to check against your credit card.
  • If you’re buying a gift card with a credit card, note that you might not earn rewards on your purchase, depending on the terms and conditions from your credit card issuer.
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Whoever dreamed up the concept of gift cards deserves a hearty pat on the back. Not only do the ingenious little pieces of plastic serve as convenient presents, and an easy way to show your support for local businesses, but they can also represent an excellent method for spending or earning rewards points. Which is especially helpful during moments when travel is less of an option. 

In order to actually cash in on those rewards, however, you have to be able to purchase them with a credit card, which begs the question — can you buy gift cards with a credit card?  

Can you buy gift cards with a credit card?

In the majority of cases, you can buy gift cards with a credit card. But there are some occasions where you might run into a bit of trouble.

Just to make sure we’re starting out on the same page, let’s do a quick recap on the differences between a debit card, a credit card, and a gift card. A debit card works like liquid cash, allowing the user to spend what they have in the bank, and no more. But with a credit card, you can spend money before you have it — up to the cap that’s known as your credit limit.

Gift cards, of course, work similarly to debit cards, letting you draw down an existing balance. The main difference is that instead of being connected to a bank account like your debit card, the balance on your gift card has been prepaid by the gifter. Once you’ve exhausted the funds, the card has no more value.

But since there are rules governing the use of credit cards and gift cards, it’s perfectly natural to wonder if you can use one to purchase the other.

There are 2 types of gift cards

There are two types of gift cards: store-based and open-loop, and typically, you should be able to use your credit card to purchase either. 

As the name suggests, store-based gift cards have to be purchased from that particular purveyor, and can be used only at that location. So if you have a Starbucks gift card, for example, you can’t use it to pay for your burrito bowl at Chipotle, and vice versa.

An open-loop gift card is an even more broad form of gift card that’s issued through a financial institution — like Visa or MasterCard, for example — and can be used anywhere that that type of card is accepted. It’s essentially an all-purpose charge card, designed for when you don’t want the recipient to be tied down to one specific outlet.

Some store-based gift cards have stricter purchasing rules

The majority of retailers allow store-based gift cards to be purchased with credit cards, but it isn’t a hard and fast rule. Some stores will have their own restrictions, either limiting or outright prohibiting these types of purchases.

In some cases, you might be asked to show some form of identification to make sure the name on your ID matches the one on your credit card. Or in some very strict cases, you might be asked to pay in cash. (Both of which add an element of complication if you’re attempting the transaction online.)

Open-loop gift cards can almost always be purchased with a credit card — although they do typically come with a purchase fee of a few dollars, so be aware of that. 

If you really think that the outlet you’re purchasing from accepts credit cards, and you’re still getting refused, it could be that your credit issuer is flagging the transaction as suspicious, trying to protect you from fraud. If that’s your experience, get in touch with your financial institution to see if flagged transactions might be the culprit.

You may not receive credit card rewards for your purchase

No matter what type of credit card you’re purchasing, be aware that your credit card provider might not issue rewards points for gift card purchases. (Although many issuers are great about letting you purchase gift cards with rewards points, so that’s an option to consider.) Either way, make sure you read up on your institution’s policy so you know what to expect.

And finally, something to bear in mind for any credit card purchase, is that no matter how great the rewards, it’s not a good idea to overextend yourself. Regardless of how quickly you’re planning to pay it off, you should avoid using more than 30% of available your available credit — doing so can negatively affect your credit score, which can have long-term effects. 

Just like with any other credit card purchases, make sure you spend within your means and pay off your balance in full whenever possible, so that interest doesn’t start piling up.

Disclosure: This post is brought to you by the Personal Finance Insider team. We occasionally highlight financial products and services that can help you make smarter decisions with your money. We do not give investment advice or encourage you to adopt a certain investment strategy. If you take action based on one of our recommendations, we get a small share of the revenue from our commerce partners. This does not influence whether we feature a financial product or service. We operate independently from our advertising sales team.

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Disclosure: This post is brought to you by the Personal Finance Insider team. We occasionally highlight financial products and services that can help you make smarter decisions with your money. We do not give investment advice or encourage you to adopt a certain investment strategy. What you decide to do with your money is up to you. If you take action based on one of our recommendations, we get a small share of the revenue from our commerce partners. This does not influence whether we feature a financial product or service. We operate independently from our advertising sales team.

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