Because gift cards can be used like cash, you might wonder if you can buy them with credit cards. The good news: retailers usually allow it. Just watch out for the possibility of declined transactions, and avoid cash advances when possible.
Yes, you can use a credit card to buy gift cards at most retailers. Occasionally, this won’t be allowed for a variety of possible reasons — for example, store-specific policies or a flagged transaction from your card issuer.
Buying gift cards with your credit card is usually coded as a purchase rather than a cash advance, though there may be exceptions.
While you’ll usually have no trouble using your credit card to buy gift cards, once in a while you may run into a few hiccups. Here are a few common instances to watch out for:
Some stores will ask that you show a matching ID when using a credit card to buy gift cards. By matching a name and face to the credit card, stores make it more difficult for people to use stolen cards for these transactions.
You could run into any number of responses at the checkout counter:
The easiest way around these roadblocks? Try a different store. If you’re feeling lucky, you could try the transaction again with another clerk at the same store.
In this case, the transaction will be halted, and you’ll need to verify on your mobile device that you initiated the purchase. If the notification comes quickly enough, you may be able to proceed with the transaction at the counter. Otherwise, you’ll need to cancel the purchase and try again after you’ve verified it with your issuer.
One way to get around this limitation is by carrying a backup credit card. This card might not offer the rewards you were hoping for, but it may save you from having to try the transaction again.
| Response | Female | Male |
|---|---|---|
| Credit limit | 65.29% | 58.91% |
| Rewards points | 56.61% | 52.02% |
| Annual fee | 55.03% | 50.4% |
| Cashback | 48.13% | 49.6% |
| Minimum repayment | 45.96% | 39.68% |
| Annual Percentage Rate (APR) | 20.32% | 31.17% |
| Balance transfer | 19.72% | 27.33% |
| Eligibility requirements | 21.3% | 20.24% |
| Introductory interest rate | 16.37% | 20.65% |
| Foreign transaction fee | 15.38% | 17.41% |
| Additional benefits such as travel insurance, extended warranty coverage, lounge access | 17.16% | 16.6% |
The answer is usually not. Buying a gift card with a credit card is usually considered a purchase. However, this transaction could be coded as a cash advance in certain instances, such as when:
If you’re worried about cash advances, try these strategies:
You can buy gift cards with just about any kind of credit card. Here are a few ideas:
Buying gift cards with grocery store credit cards can be a great choice. This is because grocery stores can offer a wide selection of gift cards, and certain cards offer strong rewards at these locations.
Cashback credit cards can be useful as well, occasionally offering bonus rewards in categories such as grocery stores and Amazon.com.
As with all cards, be sure to learn their bonus-reward rules for gift card purchases.
Dive deeper: Compare credit cards in Canada
Yes, you can earn rewards on gift card purchases with your credit card. One of the best strategies is to use a rewards credit card that will allow you to earn points or travel credits.
Before applying for a credit card or using one for a gift-card purchase, read the fine print. Check if the credit card offers bonus rewards on gift cards as some providers specifically block bonus rewards on these purchases.
Issuers typically consider gift cards to be legitimate purchases, but tread lightly if you’re dipping your toes into manufactured spending. This means buying things with your credit card that can be quickly converted to cash — such as gift cards.
Those engaging in manufactured spending may buy gift cards regularly in significant quantities. It’s this volume that typically raises flags with card issuers and leads to account shutdowns.
Ultimately, if you’re buying gift cards for manufactured spending, your issuer may eventually catch on and close your account. But if you buy gift cards here and there — particularly if you plan on giving them as presents or using them yourself — you’re probably just fine.
Though policies may vary by store and card issuer, you can usually use a credit card to buy gift cards. Avoid having your gift-card purchases classified as cash advances, and be careful with manufactured spending. Take advantage of rewards programs by using a credit that gives you points for purchases.
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