Can you buy Gift Cards with a Credit Card?

Years ago, it was relatively difficult to buy gift cards with a credit card due to the threat of fraudulent transactions. However, now credit cards can be used fairly easily to purchase gift cards, allowing you to purchase the perfect gift for someone easily.

Threat

The reason that many gift card retailers used to refuse credit card purchases is that gift cards were an easy, untraceable way for credit card scammers to make purchases. Thieves and scammers would simply use other people’s credit card information to purchase gift cards and then make purchases using those gift cards. These gift cards would then be untraceable, making it an effective way for scammers to safely make purchases on other people’s cards. Then, when the client filed a fraud claim, the retailer would then become liable for the gift card purchase, making the retailer liable and causing them to lose money.

However, with the advent of EMV chip technology, fraudulent transactions have declined tremendously, as it is much tougher now to steal someone’s credit card information. Thus, retailers are more likely to allow credit card purchases of gift cards now that it is a lot safer.

Where can I use my credit card to buy gift cards?

Pretty much all retailers accept credit card purchases for gift cards now. At all of the biggest stores, such as Amazon and Walmart, you can now use accepted credit cards to buy gift cards. Your credit card purchase may be restricted by limits and fees, but you still will be able to purchase them for the most part.

Types of gift cards

There are two main types of gift cards that encompass all other gift cards. First, you have your regular store card. Store cards are gift cards used at individual retailers such as Nike, Amazon, or Walmart. These types of cards make better for specialized gifts, as you can target the favorite store of certain individuals. However, the downside is that there is no consistency between different stores. Thus, you need to read into the terms of credit cards before buying it, checking for expiration dates, and diminishing value over time. Some gift cards will lose a certain percentage of money every month that they are not used, which can be costly.

The second type of gift card is a more holistic cash card. Cash cards can be used anywhere that certain credit cards are accepted. For example, if you use your credit card to purchase a Visa gift card, that gift card will be accepted where Visa credit cards are accepted. These cards are more flexible but are less personalized.

Purchases vs. Cash Advances

One caution you should take before making a gift card purchase is whether or not your purchase will be counted as a cash advance or a purchase. Most gift cards are counted as purchases, but some gift card purchases will count as cash advances. You should try to avoid gift card purchases with credit cards if they will count as cash advances because you will most likely be charged a higher interest fee.

If your gift card is counted as a purchase on your credit card, you will often have the chance to earn rewards. Thus, some credit cards are better to purchase gift cards with than other ones. For example, the Chase Freedom card offers 5% cash back on a category of your choice. Thus, if your category is retail, you can use this card to maximize the rewards you get by purchasing the gift card.

Conclusion

Overall, it has become very simple to use your credit card to purchase gift cards. In the past, before EMV chip technology, credit card purchases of gift cards were declined due to potential liability issues on fraudulent charges. However, now you can earn rewards when you purchase gift cards, whether they are cash cards or store cards.