Yes, you can use a credit card to buy gift cards, but the rewards and fees depend on which card you use and where you buy
Most credit cards let you buy gift cards at retailers, online, or through the card issuer itself. The transaction posts as a regular purchase, so you earn whatever rewards your card offers — cash back, points, or miles. But some issuers and retailers treat gift card purchases differently, and a few cards exclude them from bonus categories entirely. The key is knowing your card's terms before you buy.
Gift card purchases also count toward your credit limit and monthly statement like any other charge. They do not trigger cash advance fees or special restrictions. However, if you are buying gift cards to manufacture spending for a sign-up bonus, check your card's terms — some issuers have language about manufactured spending, though enforcement is rare.
Key Takeaways
- You earn the same rewards rate on gift card purchases as you do on regular purchases with that card, unless the card explicitly excludes gift cards from a bonus category.
- Buying gift cards at a warehouse club like Costco or Sam's Club often earns bonus points or cash back if your card offers extra rewards in that category.
- Some cards exclude gift cards from bonus categories (usually travel or dining cards), so check your card's terms before buying.
- Gift card purchases count as regular transactions and do not trigger cash advance fees, but they do count toward your credit limit.
Where you buy the gift card matters for rewards
The merchant category where you buy the gift card determines your rewards rate, not the fact that you are buying a gift card. If you buy a Visa gift card at a grocery store and your card offers 3% cash back on groceries, you earn 3%. If you buy the same card at a gas station and your card offers 2% at gas stations, you earn 2%.
Warehouse clubs like Costco and Sam's Club are often the best place to buy gift cards if your card offers bonus rewards there. Many cash-back cards earn 2% to 5% at warehouse clubs, which stacks on top of the gift card purchase. You are essentially earning rewards on the full value of the gift card before you even spend it.
Online gift card marketplaces like Amazon or Raise sometimes code as a general online purchase rather than a specific merchant category. Check your card's terms to see what rate you earn for "online purchases" versus a specific retailer. Some cards offer higher rewards for purchases at Amazon specifically, which can apply to gift cards sold there.
Cards that exclude gift cards from bonus categories
A small number of premium cards explicitly exclude gift cards from bonus categories. These are usually travel cards or dining cards that want to steer you toward their core categories. For example, a card might offer 3% on dining but exclude "gift cards purchased at restaurants" from that rate. You would earn only the base rate (often 1%) on the gift card purchase.
Before buying a gift card with a premium card, search the card's benefits guide or terms and conditions for the word "gift." If the card does not mention gift cards, you earn the standard rate for that merchant category. If it does mention them, it will say whether they are included or excluded.
This restriction is rare on cash-back cards and most common on cards with narrow bonus categories. A flat-rate card (like one offering 2% cash back on everything) will never exclude gift cards because there is nothing to exclude from.
Using gift cards to meet a sign-up bonus spending requirement
Gift card purchases count toward sign-up bonus spending requirements. If your card requires $5,000 in purchases within three months to earn a bonus, buying $2,000 in gift cards counts toward that $5,000. The purchase posts to your account the same way any other transaction does.
However, some issuers have terms that discourage "manufactured spending" — buying things you do not intend to use just to meet a spending threshold. Chase, American Express, and Citi all have language in their terms that reserves the right to claw back bonuses if they detect this pattern. In practice, this is rarely enforced for a single gift card purchase, but buying $10,000 in gift cards in your first month might trigger a review.
If you genuinely plan to spend the gift card value (or give it as a gift), there is no risk. If you are buying gift cards purely to hit a spending target and plan to return them or resell them, you are in a gray area that could theoretically result in losing the bonus.
Gift cards issued by your credit card company
Visa, Mastercard, and American Express all issue their own gift cards. Buying one of these through your credit card account usually earns rewards at the base rate (often 1%), not a bonus rate. The transaction codes as a cash advance or balance transfer in some cases, though most issuers treat it as a regular purchase.
Check your card's issuer website before buying a branded gift card. Some issuers offer a small discount or bonus when you buy their gift card through your account — for example, a 5% discount on the purchase price. This can be worth more than the rewards you would earn elsewhere.
Fees and limits on gift card purchases
Credit card companies do not charge a fee for buying gift cards. The transaction posts at the full purchase price, and you earn rewards on the full amount. However, the retailer selling the gift card might charge a fee — for example, a $5 fee on a $100 gift card. This fee is separate from your credit card and is set by the retailer, not your card issuer.
Gift card purchases do count toward your credit limit. If you have a $5,000 limit and buy a $2,000 gift card, your available credit drops to $3,000 until you pay the balance. This is the same as any other purchase.
There is no limit on how many gift cards you can buy with a credit card, but buying an unusually large amount in a short time might trigger a fraud alert. If your card issuer contacts you, you can confirm the purchases are legitimate.
When buying a gift card with a credit card does not make sense
If the gift card has a fee and your card earns only 1% cash back, you are losing money. A $100 gift card with a $5 fee costs $105, and 1% cash back gives you $1.05 back — a net loss of $3.95. In this case, paying cash or using a debit card is better.
If you are buying a gift card for a store where your card earns no bonus (base rate only), the rewards are minimal. A $100 gift card at 1% cash back earns $1. That is real money, but it is not a reason to choose this card over another option if you have a card that earns more in that category.
Avoid buying gift cards with a credit card if you are carrying a balance on that card. The interest you pay on the purchase will quickly exceed any rewards you earn. Pay off the card first, then buy the gift card.
Frequently Asked Questions
Do gift card purchases count toward my credit score?
Yes. Gift card purchases are regular transactions that report to the credit bureaus. They count toward your credit utilization (how much of your limit you are using) and your payment history. Buying a gift card does not affect your score differently than any other purchase.
Can I return a gift card and get the credit back to my card?
That depends on the retailer. Most retailers allow returns of unused gift cards for a refund, but some charge a restocking fee or do not accept returns at all. Check the retailer's policy before buying. If you do return it, the refund posts back to your credit card as a credit, and the rewards you earned are usually not reversed.
What if I buy a gift card and the retailer goes out of business?
Your credit card company cannot help you recover the value. Gift cards are not protected by credit card fraud rules because the transaction completed as intended. Your only option is to contact the retailer or its bankruptcy trustee. This is why buying gift cards from stable, established retailers is safer than buying from smaller businesses.
Does buying a gift card count as a cash advance?
No, not usually. Most credit card issuers treat gift card purchases as regular transactions. However, some issuers may code certain gift card purchases (like Visa or Mastercard branded gift cards) as cash advances. Check your card's terms or call the issuer before buying if you are unsure. Cash advances typically charge a fee and do not earn rewards.
Can I use a business credit card to buy gift cards for personal use?
Technically yes, but it violates most business card agreements. Business cards are meant for business expenses only. Using one to buy personal gift cards could result in the issuer closing the account or clawing back rewards. Keep personal and business spending separate.