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If you use a credit card to purchase your Starbucks drink, you might earn 1% to 2% rewards, but if you purchase a Starbucks gift card at an office supply store you could earn 5 Chase Ultimate Rewards points per dollar by using the Ink Business Cash Credit Card to make the purchase since this card earns 5% cash back on the first $25,000 spent in combined purchases at office supply stores and on internet, cable and phone services each account anniversary year and 2% cash back on the first $25,000 spent in combined purchases at gas stations and restaurants each account anniversary year. In this case, you would be charged a cash advance fee and a higher interest rate as well. If you buy gift cards with plastic and dont pay your balance in full, for example, youll wind up paying credit card interest on your revolving balance each month. How to optimize Chase Freedom, Discover It Cash Back for Q2 2022, But its not always possible, or advisable. If you purchase gift cards, make sure that you have a plan to keep track of and use them. Should you accept an early retirement offer? All trademarks and registered trademarks are the property of their respective owners. If you find discrepancies with your credit score or information from your credit report, please contact TransUnion directly. In fact, you wont have trouble finding gift cards for sale in both those places, not to mention online and in store at merchants big and small from Target and Walmart to the corner gas station, and even on, websites specializing in gift card resales, This can be a particularly useful strategy for credit cards that feature bonus categories. Are you sure you want to rest your choices? When you buy a gift card with a credit card in person, you simply bring the gift card to the register and choose credit as your form of payment. The product names used on this website are for identification purposes only. Information provided on Forbes Advisor is for educational purposes only. Were transparent about how we are able to bring quality content, competitive rates, and useful tools to you by explaining how we make money. Used strategically, gift card purchases can increase your cash back or transferable point rewards, but be sure to understand your cards terms and conditions prior to purchasing gift cards. Similarly, credit card issuers themselves may have their own rules. Property, casualty, life and health insurance services offered through NerdWallet Insurance Services, Inc. (CA resident license no. Many cards offer periodic promotions, such as a discount or increased cash back at specific merchants. Here are some of the top credit cards for gift card purchases, along with where they work best: The Blue Cash Preferred Card from American Express lets you earn 6 percent back on up to $6,000 spent at U.S. supermarkets each year (1 percent after that), 6 percent back on select U.S. streaming services, 3 percent back at U.S. gas stations and on transit and 1 percent back on all other purchases. You can also get around dealing with surprise cash advance fees by asking retailers if their gift cards code as a cash advance or purchase before you buy, or you can call your card issuer and ask them to turn off cash advances on your card altogether. Easily keep track of your orders & codes. 2022 Forbes Media LLC. And while our site doesnt feature every company or financial product available on the market, were proud that the guidance we offer, the information we provide and the tools we create are objective, independent, straightforward and free. Our editorial team receives no direct compensation from advertisers, and our content is thoroughly fact-checked to ensure accuracy. Here is a list of our partners and here's how we make money. Bankrate follows a strict editorial policy, so you can trust that were putting your interests first. Well discuss all of these below. Buying a gift card or two maybe even a handful with your credit card might not raise red flags. A Red Ventures company. Buying a gift card with a credit card can lock in rewards or discounts, Buying gift cards with a credit card isnt much different from ordering something online or buying items at your local supermarket. , so some smaller merchants may take only cash or debit card payments to begin with. Pick your favorite local or global payment method. MORE: 7 simple ways to get free gift cards. All financial products, shopping products and services are presented without warranty. But others from payment networks like Visa, Mastercard or American Express can be used anywhere that accepts cards from those networks. Sign up for the Ink Business Cash Credit Card to earn 5 percent back on up to $25,000 spent in combined purchases at office supply stores or on internet, cable and phone services each account anniversary year, 2 percent cash back on the first $25,000 spent each year at gas stations and restaurants each account anniversary year and 1 percent back on other purchases. Buying gift cards in person is a breeze regardless of how you decide to pay. All of these places sell gift cards and using a gift card at a merchant where you earn 5% can be a great way to increase rewards you earn for purchases you otherwise make anyway. This means you have less flexibility in your purchasing. Our team is full of a diverse range of experts from credit card pros to data analysts and, most importantly, people who shop for credit cards just like you. All information about The Amex EveryDay Credit Card from American Express,Costco Anywhere Visa Card by Citi and Target Redcard has been collected independently by Bankrate and has not been reviewed or approved by the issuer. Is it a good idea? With that being said, you should choose a credit card for gift cards carefully and based on the type of rewards you hope to earn. Purchasing gift cards for anticipated future spending can be especially useful with cards offering category bonuses, but can also be used with cards like the Blue Cash Preferred Card from American Express that have annual limits on bonus cash-back categories. One major benefit of using a credit card to pay for gift cards is the fact you can earn rewards on your purchase. Violating that rule could lead your issuer to claw back rewards or, worst-case scenario, shutter your account entirely and bar you from applying for its credit cards again. There are a few reasons to be judicious in your gift card purchases. Why this card is ideal for gift cards: The Target RedCard also lets you save 5 percent off specialty gift cards for travel, restaurants, subscription services and more. What is a credit card Schumer box and how do you read it? During the year, I will surely spend at least $1,500 on groceries, so purchasing a grocery store gift card during a quarter when my Discover it Cash Back card offers 5% cash back on groceries means that I can earn an effective 5% cash back on a full $1,500 of my grocery store purchases. It can be an easy way to maximize your rewards but youll want to play your cards right. That could be a big problem. Second, gift cards do not have the same consumer protections as credit cards, such as limited liability for fraudulent purchases. In addition to writing for Bankrate and CreditCards.com, Johnson does ongoing work for clients that include CNN, Forbes Advisor, LendingTree, Time Magazine and more. But others from payment networks like. Buying gift cards can be a reasonable way to maximize spending on future purchases and earn additional rewards. The most obvious reason why you might want to buy a gift card with a credit card is to earn points or cash back on that gift card purchase. Instantly buy and send gift cards to friends and family. Some rewards credit cards only let you earn cash back, while others offer flexible rewards or points you can use in a specific airline or hotel program. Or say you have a card like the Target REDcard Credit Card, which offers a 5% discount on all eligible Target purchases including many gift cards to other retailers. We do not offer financial advice, advisory or brokerage services, nor do we recommend or advise individuals or to buy or sell particular stocks or securities. Coverage.com, LLC is a licensed insurance producer (NPN: 19966249). On the flip side, some retailers limit how many gift cards you can buyparticularly when you pay with a credit card. Here is a list of our partners. , which offers a 5% discount on all eligible Target purchases including many gift cards to other retailers. 2022 Bankrate, LLC. For instance, while you can use the Target REDcard Credit Card to buy gift cards to Target itself, those purchases are not eligible for the 5% discount. Its also common to find ways to buy gift cards at a discount so you can save money on a large purchase. When you purchase a gift card, you are converting cash, which can be used anywhere, into a credit that can only be used at a certain merchant. You should also be aware that some credit cards threaten to treat gift card purchases as a cash advance. How PS Plus Cards Convert to the New Subscriptions, Redeem your stash for the code of your choice. Gift cards are an easy-to-please present for just about anyone. Bankrate.com does not include all companies or all available products. Past performance is not indicative of future results. App Store is a service mark of Apple Inc. Google Play and the Google Play logo are trademarks of Google LLC. While we adhere to strict editorial integrity, this post may contain references to products from our partners. Please try again later. Bankrate has partnerships with issuers including, but not limited to, American Express, Bank of America, Capital One, Chase, Citi and Discover. Gas stations and grocery stores might not be big line items in your budget for any particular quarter but you could still use your credit card in those places to buy gift cards for merchants that you. Make sure you read your credit cards terms and conditions for more specific information. If you want to buy an Amazon.com gift card online, for example, you would simply head to Amazon.com and select whether you want a gift card mailed to you, one you can print at home or a gift card via email. And as with traditional gift cards, there may be restrictions on such purchases, from either the seller or your credit card company. Simply, breakage represents the amount of gift cards that are purchased but never redeemed. The Target RedCard is available exclusively for purchases made at Target, which means it is rather limited. Terms and enforcement of terms vary by issuer and card. There are many reasons people wind up buying gift cards with a credit card, including for the sake of convenience. Many issuers exclude gift cards or cash-like transactions from earning rewards. Still, make sure your gift cards dont get lost in your junk drawer. As a side note, buying gift cards from small businesses can also be a helpful move if you are looking for a way to help small businesses recover from the economic impact of COVID-19. But what if you, say, drive an electric vehicle, or arent much of a home cook? This may influence which products we write about and where and how the product appears on a page. If someone fraudulently charges your credit card, theres a good chance that you wont end up paying for that fraudulent charge. For example, in April 2022 American Express is offering $10 back on $60 at Macys on one of my Amex credit cards. Finally, one of the reasons that merchants love gift cards is because they are subject to breakage. Others may not accept cards that run on certain payment networks, like American Express. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. Which certificate of deposit account is best? Read about our cookies in our cookie policy. Advantages include the potential for rewards on your spending, although how much youll earn depends on the cash back credit card or rewards credit card you have. Walgreens, for instance, will cancel an order of certain kinds of gift cards if the combined amount is over $750 for a pickup order.

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