At one time or another, most of us have had to buy a gift for someone who is difficult to shop for. Buying a gift card is a reasonable solution to this problem.
Many retailers and credit card issuers allow you to buy gift cards with credit cards. Some card issuers may restrict this type of transaction, while some stores have their own restrictions or don't offer gift cards at all—smaller stores and private businesses, for example.
Let's review some of the alternatives and stipulations for using a credit card to buy a gift card.
How can you use a credit card to buy a gift card?
If you find yourself unable to buy a gift card with a credit card, there are a couple convenient alternatives.
Buy a gift card online with a credit card
These days, retailers are more likely to provide an option to buy gift cards on their websites. In general, credit cards are accepted for this type of transaction. Gift cards might be usable on the website and in the retailer's brick-and-mortar stores, but that depends on the retailer.
Just because you buy a gift card online doesn't mean it will be delivered that way. As you check out, the merchant might give you the option of receiving a plastic card in the mail for the gift card you're buying.
Redeem rewards from your credit card for a gift card
Gift cards are a common redemption option in credit card rewards programs. This is partly because gift cards are popular presents yearround. Depending on your credit card, the gift cards available this way can range from niche stores to department stores, restaurants and even entertainment services.
Converting rewards points
The conversion rate from rewards points to gift card dollars is usually the same as it is for statement credits: one point equals one cent. Check your credit card's rewards program for the exact conversion and special offers. And if you're saving points to redeem them for a gift card, remember to check if your points expire.
Chase rewards points don't expire as long as your account is open, and sometimes gift cards are offered for a discounted number of rewards points. If you have a Chase credit card, visit Chase Ultimate Rewards® to explore the possibilities.
Different types of gift cards
Some stores sell their own gift cards, which are usually valid at the retail store and its partners. This type of gift card is also available at various third-party websites. Conversely, credit card networks like Visa® and Mastercard® offer generic gift cards, which you can use at any seller that accepts cards in that network.
Retail or store gift cards
Buying a gift card from someone's favorite store is a good way to personalize the gift even though it doesn't always feel that way. Another advantage is that store cards usually don't have fees associated with them; the amount you pay should be the face value of the gift card, particularly if you buy it directly from that store.
For small and larger retailers alike, there is a risk that a gift card's value could be lost if the store goes out of business before the card is used.
Generic gift cards
Generic gift cards offer more flexibility than store cards, which raises their appeal as gift options. This type of card is tied to a card network like Mastercard or Visa.
A retailer that accepts credit cards in a certain network should accept that network's gift cards. For example, a store that accepts Visa should also accept a Visa gift card. Credit cards are commonly accepted to purchase generic gift cards in department stores, pharmacies, grocery stores and online.
Virtual gift cards
You might also call these “eGift Cards" because they're purchased and delivered electronically. Usually there's no option to receive a plastic card, but virtual gift cards work the same way that physical ones do. You may even get a barcode or QR code that you can print and use at a store or show from your phone. Nowadays, you're more likely to find virtual gift cards for sale through retailers' websites and third-party gift card sites.
What to know before you buy a gift card with a credit card
Although you might be able to use your credit card, your rewards program may not let you earn rewards on a gift card purchase. The credit card issuer may categorize the purchase and exempt it from rewards earning.
There's a small chance a card issuer may treat a gift card purchase as a cash advance. Before you buy a gift card with your credit card, a helpful step you can take is to check your card's terms and conditions.
What fees are involved with gift cards?
Some gift card may have a fixed fee and others a percentage of the gift card amount. Fees for inactivity, known as dormancy fees, may apply to gift cards that are not used for at least 12 months.
Both activation and dormancy fees have to be disclosed clearly before a gift card is purchased. Unfortunately, that means reading the fine print.
What is the best type of gift card to buy?
The ideal gift card has no fees associated with it, doesn't expire and lets your recipient use it both in person and online. If you made it this far, you're also looking for the merchant to accept your credit card as payment for the gift card.
Both store gift cards and generic gift cards can meet all these criteria, but whether you can use a credit card depends on your card issuer and the merchant. Retail cards for someone's favorite store are thoughtful, but they may appreciate a generic gift card's flexibility.
Ultimately, deciding on the best type of gift card will be up to you. Remember that you can redeem credit card rewards for a gift card—explore the possibilities of Chase Ultimate Rewards.