Yes, you can use a credit card to buy gift cards at most retailers
You can buy gift cards with a credit card at nearly every major retailer — Target, Amazon, Best Buy, Walmart, and most grocery stores all accept credit cards for gift card purchases. The transaction processes like any other purchase: the retailer charges your card, and you walk out with the card or receive it by email.
The real question is not whether you can, but whether you should. Using a credit card for gift cards creates a specific financial situation that changes depending on your card's rewards structure, your spending habits, and whether you're carrying a balance.
Key Takeaways
- Credit cards process gift card purchases as regular transactions, so you earn whatever rewards your card offers — typically 1% to 5% back depending on the card and retailer.
- Buying gift cards with a card you're carrying a balance on costs you interest charges that almost always exceed any rewards you'd earn.
- Some retailers offer bonus rewards on their own gift cards (like 4% back at Target with a Target RedCard), which can make the purchase worthwhile if you plan to spend the balance.
- Gift cards purchased with a credit card are still your responsibility if the card is lost or stolen, even though the underlying purchase was made with credit.
- Manufactured spending through gift cards — buying them to meet sign-up bonuses — violates most card issuers' terms and can result in bonus clawback or account closure.
How rewards work when you buy a gift card
Your credit card treats a gift card purchase the same way it treats buying groceries or gas. If your card earns 2% cash back on all purchases, you earn 2% on the gift card amount. If your card earns 5% in a specific category like groceries, and you buy a gift card at a grocery store, you typically earn 5% on that purchase.
The rewards are yours immediately, even though the gift card recipient hasn't spent the balance yet. You don't have to wait for them to use it. This is different from a rebate or discount — the card issuer credits the rewards to your account based on the purchase you made, not on what happens to the gift card later.
Some retailers sweeten this by offering bonus rewards on their own branded gift cards. Target's RedCard (a store credit card) offers 4% back on Target gift cards, and some grocery store loyalty programs offer 4% to 5% back on their own gift cards when you buy them in-store. These are worth tracking if you buy gift cards regularly.
When carrying a balance makes gift card purchases expensive
If you're carrying a balance on your credit card, the interest you pay on that balance almost always exceeds any rewards you earn. A typical credit card charges 18% to 24% annual interest. If you buy a $100 gift card on a card with a $5,000 balance at 20% APR, you're paying roughly $1 in interest per month on that $100 purchase — far more than the $1 to $5 in rewards you'd earn.
The math is simple: don't use a card with a balance to buy gift cards unless the rewards rate is genuinely exceptional (which it won't be). Pay down the balance first, or use a different card with a 0% introductory APR if you have one.
Gift card liability if your card is lost or stolen
Once you buy a gift card with your credit card, the gift card itself becomes the liability. If you lose it or it's stolen before the recipient uses it, your credit card company is not responsible — the gift card issuer is. You would need to contact the retailer's customer service to report it lost and request a replacement, which they may or may not honor depending on their policy.
This is different from a fraudulent credit card charge, where your card issuer typically covers the loss. The credit card company's job ended when they processed the purchase. After that, the gift card is a stored-value product, and the retailer controls what happens if it goes missing.
Some retailers (like Amazon and Target) track gift card balances and will replace a lost card if you can provide proof of purchase. Others have no replacement policy. Check the retailer's terms before buying, especially if you're spending a large amount.
Why gift card purchases don't count toward sign-up bonuses
Most credit card issuers explicitly exclude gift card purchases from sign-up bonus categories. If your new card offers "$200 back after $500 in purchases," buying $500 in gift cards won't trigger the bonus. The issuer considers this manufactured spending — using the card in ways designed to hit spending thresholds rather than for genuine purchases.
Card issuers monitor for this pattern. If you're flagged for manufactured spending, the issuer can claw back your bonus, close your account, or both. The terms of service for nearly every major card explicitly state that gift card purchases may not count toward bonuses, and some cards go further and exclude them from earning rewards entirely.
If you're working toward a sign-up bonus, buy gift cards only if you would have spent that money anyway — not as a strategy to reach the threshold faster.
Gift cards as a way to lock in rewards before a card closes
One legitimate use case: if you're closing a credit card account and want to use up remaining rewards, buying a gift card can be a practical way to spend the balance. You earn the rewards on the purchase, and you have a usable card to give away or use yourself. This is straightforward and doesn't violate any terms.
The same applies if you're downgrading a card with an annual fee. If you have $150 in rewards accumulated and a $95 annual fee coming due, buying a $150 gift card lets you use the rewards before you close the account. Just make sure you actually want the gift card — don't buy one just to avoid losing the rewards if you won't use it.
Comparing gift card purchases across different card types
| Card Type | Typical Rewards on Gift Cards | Best Use Case |
|---|---|---|
| Flat-rate cash back (1.5% to 2%) | 1.5% to 2% on all gift cards | Buying gift cards for any retailer; rewards are consistent |
| Category-based card (3% to 5% in categories) | Depends on retailer; grocery store cards earn 3% to 5% on grocery gift cards | Buying gift cards at retailers where your card earns bonus rewards |
| Retailer-branded card (store credit card) | Often 4% to 5% on store gift cards; 1% to 2% elsewhere | Buying that retailer's gift cards if you have their branded card |
| Card with a balance (any type) | Rewards earned, but interest charges exceed them | Not recommended; pay down balance first |
Frequently Asked Questions
Do I earn rewards on gift card purchases at all retailers?
Most do, but not all. Warehouse clubs like Costco and Sam's Club sometimes exclude gift cards from rewards. Check your card's terms or contact the issuer if you're unsure. Retailer-branded cards occasionally exclude their own gift cards from bonus rewards, though they usually earn at least 1%.
Can I buy a gift card with one credit card and pay it off with another?
Technically yes, but it's not useful. You'd earn rewards on the first card, then use a second card to pay the balance. This doesn't increase your rewards — you're just moving money around. If you're trying to meet a spending threshold on a new card, this won't work; most issuers exclude gift card purchases from bonus categories regardless of how you pay.
What happens if the gift card is never used?
You keep the rewards. The rewards are credited to your account when you make the purchase, not when the gift card is spent. If the recipient never uses it, that's their loss — you've already earned your cash back or points.
Are there any gift cards I shouldn't buy with a credit card?
Avoid buying third-party gift cards (like Visa or Mastercard gift cards) with a credit card. These often carry activation fees of $3 to $10, which erase any rewards you'd earn. Stick to retailer-specific gift cards, which have no activation fees.
Can I return a gift card I bought with a credit card?
Retailer policies vary widely. Some allow returns within 30 days if the card hasn't been used. Others don't accept returns on gift cards at all. Check the retailer's return policy before buying. If you do return it, the refund goes back to your credit card, and the rewards you earned typically stay in your account (though some issuers may claw them back — check your card's terms).