Home > Personal Finance > How Can You Get Credit Card Rewards for Buying Gift Cards?

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The gift card market is worth more than $130 billion annually. Is that any surprise? You’ve probably bought at least one gift card in the past year for a friend or family member. It’s an easy way to show someone appreciation and to make sure they can get whatever they want. But what if we told you both you and the gift-giver can benefit from gift cards? That’s right—you can get credit card rewards for buying gift cards.

How Can Buying Gift Cards Earn You Rewards?

If you have a rewards credit card, you earn points or miles on some—or all—of your purchases. Unless your credit card terms of service say gift card purchases don’t count for rewards, you can get points or miles when you use your credit card to buy a gift card.

For example, let’s say you earn one point per dollar spent. You’re planning to buy your mom a $50 gift card for her birthday and your niece a $25 gift card for her special day. Use a credit card to buy those gift cards at retailers, and you can earn 75 points just for buying gifts you were already going to purchase.

Maximizing Rewards When Buying Gift Cards

But it does get better. If you plan ahead just a little, you can maximize the rewards you get. For example, imagine you want to buy a $100 gift card for a couple for their wedding.

Your credit card gives you one point per dollar for any purchase. You could buy that gift card at a department store or drug store and earn 100 points. But what if you get three points per dollar when you shop at grocery stores? You may be able to purchase the gift card at a grocery store and earn 300 points.

But you don’t have to limit your gift card rewards earning to actualgifts. Are you planning to buy an appliance from a store such as Best Buy? Imagine it’s going to cost around $500. You might purchase $500 in Best Buy gift cards at the grocery store with your credit card and use them to buy the appliance. And if you’re earning three points per dollar, that’s 1,500 points!

Use Gift Card Purchases to Meet Signup Bonus Requirements

If your new credit card requires you to spend $3,000 in three months to get the signup bonus points, gift cards might help you get there. Perhaps you’ve spent $2,000, but you really don’t need anything else. You don’t want to spend $1,000 on random things just to earn the bonus points. But you could buy $1,000 worth of grocery, restaurant and other gift cards that you can use to fund your life in the next few months.

Avoid Abusing the System

Of course, you need to approach getting rewards from buying gift cards with moderation. If a credit card company thinks you’re abusing the system, they may cancel your points—or even your account.

So how could you abuse the system? If you’re spending thousands a month buying gift cards at grocery stores to maximize category rewards points and then selling those cards to friends, that’s abuse.

But imagine that you need to buy medication and other supplies at a drug store every month. If those costs are around $150, you might use your credit card to buy a $150 gift card at a grocery store chain every month. That’s because the credit card in question gives you six points per dollar spent at grocery stores.

You’ll earn an extra 900 points a month, while buying medications you already would be paying for. That probably won’t be seen as abuse.

Should You Use Credit Card Rewards for Gift Cards?

This really isn’t a two-way street. While you canuse credit card rewards to get gift cards in most cases, it’s usually the most expensive way to redeem your rewards. That’s because you need more points for every dollar redeemed on gift cards than you might on travel rewards or other options.

Reward Credit Cards

If you’re planning to use your credit card to buy gift cards at grocery stores or other retailers to earn more rewards, make sure it’s allowed first. If you don’t already have a rewards card, you can shop for one in Credit.com’s credit card marketplace. Here are a few options:

  • Chase Sapphire Preferred Card, which lets you earn one point for every dollar spent and comes with a generous signup bonus

Chase Sapphire Preferred® Card

Apply Now
on Chase's secure website
Card Details
Intro Apr:
N/A

Ongoing Apr:
15.99% - 22.99% Variable

Balance Transfer:
15.99% - 22.99% Variable

Annual Fee:
$95

Credit Needed:
Excellent-Good
Snapshot of Card Features
  • Earn 60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $750 toward travel when you redeem through Chase Ultimate Rewards®
  • 2X points on travel and dining at restaurants worldwide, eligible delivery services, takeout and dining out & 1 point per dollar spent on all other purchases.
  • Get 25% more value when you redeem for travel through Chase Ultimate Rewards®. For example, 60,000 points are worth $750 toward travel.
  • Get unlimited deliveries with a $0 delivery fee and reduced service fees on orders over $12 for a minimum of one year on qualifying food purchases with DashPass, DoorDash's subscription service. Activate by 12/31/21.
  • Earn 2x total points on up to $1,000 in grocery store purchases per month from November 1, 2020 to April 30, 2021. Includes eligible pick-up and delivery services.

Card Details +

  • Mastercard Black Card, which lets you earn 1.5% cash back or 2% airfare rewards

Mastercard® Black Card™

Apply Now
on Luxury Card's secure website
Card Details
Intro Apr:
N/A

Ongoing Apr:
14.99%

Balance Transfer:
0% introductory APR for the first fifteen billing cycles following each balance transfer that posts to your account within 45 days of account opening. After that, your APR will be 14.99%.

Annual Fee:
$495 ($195 for each Authorized User added to the account)

Credit Needed:
Excellent
Snapshot of Card Features
  • Patented black-PVD-coated metal card—weighing 22 grams.
  • 2% value for airfare redemptions with no blackout dates or seat restrictions. 1.5% value for cash back redemptions. Earn one point for every one dollar spent.
  • 24/7 Luxury Card Concierge®—available by phone, email and live mobile chat. Around-the-clock service to help you save time and manage tasks big and small.
  • Exclusive Luxury Card Travel® benefits—average value of $500 per stay (e.g., resort credits, room upgrades, free wifi, breakfast for two and more) at over 3,000 properties.
  • Annual Airline Credit—up to $100 in statement credits toward flight-related purchases including airline tickets, baggage fees, upgrades and more. Up to a $100 application fee credit for the cost of TSA Pre✓® or Global Entry.
  • Enrollment in Priority Pass™ Select with access to 1,300+ airport lounges worldwide with no guest limit. Includes credits at select airport restaurants for cardholder and one guest.
  • Cell phone protection for eligible claims of up to $1,000 each year. Plus additional World Elite Mastercard® benefits.
  • Annual Fee: $495 ($195 for each Authorized User). Terms and conditions apply.

Card Details +

  • TD Cash Credit Card, which lets you earn 2% cash back at grocery stores among other perks

TD Cash Credit Card

Apply Now
on TD Bank's secure website
Card Details
Intro Apr:
0% Introductory APR for 6 months on purchases

Ongoing Apr:
12.99%, 17.99% or 22.99% (Variable)

Balance Transfer:
0% Introductory APR for 15 months on balance transfers

Annual Fee:
$0

Credit Needed:
Excellent-Good
Snapshot of Card Features
  • Earn $150 Cash Back when you spend $500 within 90 days after account opening
  • Earn 3% Cash Back on dining
  • Earn 2% Cash Back at grocery stores
  • Earn 1% Cash Back on all other eligible purchases
  • $0 Annual Fee
  • $0 Foreign Transaction Fee
  • Visa Zero Liability
  • Instant credit card replacement
  • Digital Wallet
  • Contactless Payments

Card Details +

Want to Get Approved? Have a Good Credit Score

Getting approved for top rewards cards does usually require good credit. Before you apply, make sure you know where you stand. Consider signing up for ExtraCredit to get details about your credit score as well as cash-back rewards when you’re approved for certain offers, including credit cards.

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