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What credit cards should you use to purchase gift cards?

Jan. 09, 2022
14 min read
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While it’s rarely a good idea to redeem your credit card rewards to buy a gift card, you should absolutely be maximizing your gift card purchases by paying for them with the right credit card. Luckily, plenty of cards offer bonus rewards at places like gas stations, grocery stores and office supply stores that sell gift cards to just about anywhere.

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Best credit cards for purchasing gift cards

Comparing the best credit cards for gift cards

CardCategory bonus on merchants that sell gift cardsReturn on spend (based on TPG's valuations)Welcome bonus
Blue Cash Preferred® Card from American Express6% cash back on up to $6,000 per calendar year (then 1%) at U.S. supermarkets; 3% back at U.S. gas stations. Cash back is received in the form of reward dollars that can be redeemed for statement credits.3-6%Earn $250 statement credit after you spend $3,000 in purchases on your new card within the first six months. Terms apply.
Ink Business Cash Credit Card5% cash back (or 5 points per dollar) on the first $25,000 in spend at office supply stores each account anniversary year.5 to 10%$900 cash back after you spend $6,000 on purchases in the first three months
American Express® Gold Card4x points on up to $25,000 per calendar year at U.S. supermarkets; then 1x points.8%Earn 60,000 Membership Rewards points after you spend $4,000 on eligible purchases with your new Card within the first six months. Terms apply.
Bank of America® Customized Cash Rewards credit card3% cash back on the first $2,500 per quarter in combined purchases in the category of your choosing (then 1%).3%$200 cash bonus after you spend $1,000 in purchases in the first 90 days of account opening
Costco Anywhere Visa® Card by Citi 4% cash back on the first $7,000 spent on eligible gas per year, then 1%; 2% on all other Costco purchases.2 to 4%N/A

Let’s take a look at the details of each of our top picks.

Amex Blue Cash Preferred

(Photo by The Points Guy)

Annual fee:$0 intro annual fee for first year, then $95 (see rates and fees).

Welcome offer: Earn a $250 statement credit after you spend $3,000 in purchases on your new card within the first six months.

Why it’s great for gift card purchases: You’ll earn 6% cash back on the first $6,000 spent at U.S. supermarkets each calendar year (then 1%) and 3% back at U.S. gas stations. Gas stations tend to also offer a solid gift card selection.

The Blue Cash Preferred is a cash-back credit card, which is less valuable than earning Amex Membership Rewards points. But if you are a fan of cash-back rewards, 6% back on gift cards is as good as it gets, making the Blue Cash Preferred one of the best credit cards on the market today.

Keep in mind that Amex sometimes doesn’t pay out category bonuses on gift cards, especially those purchased at grocery stores. It can be hit or miss when you use Amex cards, though the Blue Cash Preferred does offer a great return on grocery store spending.

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Check out our full Amex Blue Cash Preferred Card review.

Official application link: Amex Blue Cash Preferred.

Ink Business Cash

(Photo by John Gribben for The Points Guy)

Annual fee: $0

Sign-up bonus: Earn $900 cash back after you spend $6,000 in the first three months of account opening.

Why it’s great for gift card purchases: The Ink Business Cash offers 5% back on office supply store purchases (on up to $25,000 in annual bonus spend). Office supply chains such as Staples are known for having a large selection of gift cards — including ones for many retailers that won't earn rewards with other cards, making gift cards are often the best way to earn rewards on those purchases.

A gift card purchase at an office supply store becomes even more lucrative if you also have a Chase Sapphire Preferred Card, Chase Sapphire Reserve or the Ink Business Preferred Credit Card. Then, your 5% back turns into 5 Ultimate Rewards points per dollar spent, which can be redeemed at a much higher value than cash back.

Beyond that, the Ink Business Cash Credit Card is the best business credit card for office supplies on the market today.

Check out our full Chase Ink Business Cash review.

Amex Gold Card

(Photo by Isabelle Raphael / The Points Guy)
(Photo by Isabelle Raphael/The Points Guy)

Annual fee: $250 (see rates and fees).

Welcome offer: Earn 60,000 Membership Rewards points after you spend $4,000 on eligible purchases with your new card within the first six months (worth $1,200, according to TPG valuations). You may be eligible for a 75,000-point welcome offer for the card after you spend $4,000 in the first three months when you use the CardMatch Tool (offer subject to change at any time).

Why it’s great for gift card purchases: With the Amex Gold, you'll earn 4 points per dollar on the first $25,000 spent at U.S. supermarkets each calendar year, then 1 point per dollar, which comes out to an 8% return. Supermarkets are another great place to pick up a variety of gift cards. Just remember that superstores like Walmart and Target are not included in the supermarket bonus category.

With a higher spending threshold for its bonus, you can use gift card purchases to meet that spending requirement while still earning rewards.

Like the Blue Cash Preferred, earning category bonuses on gift cards (especially when bought at grocery stores) can be hit or miss, so keep an eye out for earning patterns on your card.

Check out our full Amex Gold Card review.

Official application link: Amex Gold Card.

Bank of America Customized Cash Rewards credit card

(Photo by John Gribben for The Points Guy)

Annual fee: $0

Sign-up bonus: Earn a $200 cash bonus after you spend $1,000 in the first 90 days of account opening.

Why it’s great for gift card purchases: With the Bank of America Customized Cash Rewards card, you can choose which category earns 3% back. This list includes drugstores, online retailers and home improvement stores, all of which are places you can find gift cards. You’ll also earn 2% back on grocery stores and wholesale clubs. There is a $2,500 cap on combined rewards spending per quarter (then 1%). Online shopping is an especially compelling category because you’ll be able to get cash back on digital gift cards from a family member’s favorite online boutique, Etsy shops or other small businesses that may not sell gift cards at grocery stores.

If you qualify for the Bank of America Preferred Rewards program, you can actually earn anywhere from 3.75% back to 5.25% back on your chosen bonus category, as well as 2.5% to 3.5% at grocery stores and wholesale clubs. Considering this card comes with no annual fee, that’s a great cash-back return for gift cards.

Check out our full Bank of America Customized Cash Rewards card review.

Official application link: Bank of America Customized Cash Rewards.

Costco Anywhere Visa® by Citi

(Photo by John Gribben for The Points Guy)
(Photo by John Gribben for The Points Guy)

Annual fee: $0, if you have a Costco membership.

Sign-up bonus: None.

Why it’s great for gift card purchases: If you get gas at a place that also sells gift cards, you could earn 4% back with the Costco Anywhere Visa on eligible gas, and EV charging purchases (on the first $7,000 per year; then 1%). Additionally, Costco sells a wide variety of gift cards, and you’ll earn 2% back across all Costco purchases. Of course, that’s not quite as high as some of the other options on this list, but it is worth mentioning.

The two downsides to this card are that you have to have a Costco membership to apply and you only get rewards once per year in the form of a reward certificate.

Check out our full Costco Anywhere Visa review.

Official application link: Costco Anywhere Visa by Citi

Can you buy gift cards with a credit card?

(Photo by dennizn/Shutterstock)

Yes, you can buy gift cards with a credit card. Most retailers will accept them, but your issuer may or may not let you earn rewards for this purchase, so make sure you check the stipulations regarding gift card purchases on your account beforehand.

According to CNBC, up to $3 billion worth of gift cards go unused every year. So while your loved ones may not be making the most of their gift card redemptions every holiday season, you can do your research and rest on the satisfaction that you at least received your credit card rewards from the purchase.

Why should I use gift cards?

(Screenshot from American Airlines)

The most obvious reason to buy gift cards is to use them as a gift to a friend or loved one, but there are also reasons why buying gift cards for yourself might be a good idea.

Gift cards operate like cash at most retailers, so using the gift cards themselves won’t earn rewards. Given that, you might be asking why I would suggest purchasing them to use. Wouldn’t it be better to use a rewards credit card for your retail purchase to earn rewards?

Unfortunately, a lot of retailers don’t fall into common bonus categories, which means you’d likely only end up with 1% or 1 point per dollar on those purchases, but gift cards can be bought at locations that do earn rewards. If you buy a gift card to Nordstroms or Bass Pro Shop at Staples with your Ink Business Cash, that’s 5% or 5 points per dollar earned on those purchases instead of the 1% or 1 point per dollar you would earn otherwise.

Should I use rewards to buy gift cards?

(Screenshot from Chase)

Many credit cards allow you to redeem your rewards for gift cards, but it is rarely a good idea. When redeeming points or miles, you want to make sure that you’re getting a solid redemption value from each point or mile and gift cards rarely give you the best value for your rewards.

When it comes to transferable currencies like Amex Membership Rewards or Chase Ultimate Rewards, you’re typically only getting between .7 cents and 1.1 cents of value from each point. Considering you can redeem Chase points for 1.5 cents each (if you have the Chase Sapphire Reserve) through the Chase travel portal or potentially at a much higher rate when you transfer to an airline partner, it doesn’t make sense to use your Ultimate Rewards balance to stock up on gift cards. Amex points are also easily worth more than 1.1 cents each when you maximize transfer partner redemption options.

There is an exception to this. Some credit cards offer fixed-value rewards, such as the Bank of America Customized Cash Rewards card mentioned above. With fixed-value credit cards, your rewards are worth the same amount, no matter how you redeem them. In that case, you could get the same value from buying gift cards as you would travel. Just keep in mind that if you’re using your rewards to buy the gift cards, you won’t get to reap the benefits of bonus rewards on your purchase.

Using a portal to redeem gift cards

(Screenshot from American Airlines)

Buying gift cards is kind of like buying cash for a certain retailer, which means you can lose out on rewards when you redeem the gift cards. However, there is a way to double dip on gift card rewards: online shopping portals.

Let’s say you use your Amex Gold to earn 4 points per dollar on Ulta Beauty gift cards bought at your local U.S. supermarket (on the first $25,000 in purchases each calendar year; then 1 point per dollar). You can then redeem that gift card at Ulta.com through a shopping portal (at the time of publication, the AAdvantage portal was offering 6 miles per dollar spent on Ulta purchases). So, where you would have gotten no rewards from restocking your favorite concealer and haircare products by buying in-store, you could get 4 Membership Rewards points per dollar spent and 6 AAdvantage miles per dollar spent.

Bottom line

Gift cards make easy, excellent gifts for picky friends and family members and they can also help you maximize your own rewards and credit card strategy. Just make sure you’re using the best credit card to buy those gift cards and always remember to use an online shopping portal whenever possible to redeem them.


Official application link: Amex Blue Cash Preferred.
Official application link: Ink Business Cash.
Official application link: Amex Gold.
Official application link: Bank of America Customized Cash Rewards.
Official application link: Costco Anywhere Visa by Citi.


Additional reporting by Stella Shon.

For rates and fees of the Amex Gold Card, click here.
For rates and fees of the Blue Cash Preferred Card, click here.

Featured image by You can redeem your points on the Citi Rewards+ for gift cards. (Photo by Summer Hull / The Points Guy)
Editorial disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airline or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

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How we chose these cards

Our points-obsessed staff uses a plethora of credit cards on a daily basis. If anyone on our team wouldn’t recommend it to a friend or a family member, we wouldn’t recommend it on The Points Guy either. Our opinions are our own, and have not been reviewed, approved, or endorsed by our advertising partners.
See all best card offers

TPG featured card

Best card for premium perks while traveling
TPG Editor‘s Rating
Card Rating is based on the opinion of TPG‘s editors and is not influenced by the card issuer.
4 / 5
Go to review

Rewards

2 - 10X points
10XEarn unlimited 10X miles on hotels and rental cars booked through Capital One Travel
5X5X miles on flights booked through Capital One Travel.
2X2 Miles per dollar on every purchase, every day

Intro offer

75,000 bonus miles
Earn 75,000 bonus miles when you spend $4,000 on purchases in the first 3 months from account opening, equal to $750 in travel

Annual Fee

$395

Recommended Credit

740-850
Excellent
Credit ranges are a variation of FICO© Score 8, one of many types of credit scores lenders may use when considering your credit card application.

Why We Chose It

The Capital One Venture X card is one of the best all-round travel credit cards ever launched. Not only is it offering a tremendous welcome bonus, but cardholders can earn tons of miles on everyday spending and receive a 10,000-mile anniversary bonus to boot. Its annual fee is $395, but cardholders can count on up to $300 in statement credits toward travel booked through Capital One Travel each year and other valuable benefits like access to Priority Pass lounges and Capital One’s own growing family of airport lounges.

Pros

  • Excellent welcome offer worth 75,000 miles after you spend $4,000 on purchases in the first three months.
  • Up to $300 in annual travel statement credits toward bookings make through Capital One Travel.
  • 10,000 bonus miles (worth $100 toward travel) each account anniversary.

Cons

  • The $395 annual fee might be expensive for some, but this card’s benefits provide much more value than that.
  • If you don’t travel frequently, this might not be the best card for you.
  • Earn 75,000 bonus miles when you spend $4,000 on purchases in the first 3 months from account opening, equal to $750 in travel
  • Receive up to $300 back annually as statement credits for bookings through Capital One Travel, where you'll get Capital One's best prices on thousands of options
  • Get 10,000 bonus miles (equal to $100 towards travel) every year, starting on your first anniversary
  • Earn unlimited 10X miles on hotels and rental cars booked through Capital One Travel and 5X miles on flights booked through Capital One Travel
  • Earn unlimited 2X miles on all other purchases
  • Unlimited complimentary access for you and two guests to 1,400+ lounges, including Capital One Lounges and our Partner Lounge Network
  • Receive up to a $100 credit for Global Entry or TSA PreCheck®
  • Use your Venture X miles to easily cover travel expenses, including flights, hotels, rental cars and more—you can even transfer your miles to your choice of 15+ travel loyalty programs
  • Named editors' choice for "Best New Credit Card of 2021" by The Points Guy
  • Earn 10 miles per dollar when you book on Turo, the world's largest car sharing marketplace, through May 16, 2023
Best card for premium perks while traveling
TPG Editor‘s Rating
Card Rating is based on the opinion of TPG‘s editors and is not influenced by the card issuer.
4 / 5
Go to review

Rewards Rate

10XEarn unlimited 10X miles on hotels and rental cars booked through Capital One Travel
5X5X miles on flights booked through Capital One Travel.
2X2 Miles per dollar on every purchase, every day
  • Intro Offer
    Earn 75,000 bonus miles when you spend $4,000 on purchases in the first 3 months from account opening, equal to $750 in travel

    75,000 bonus miles
  • Annual Fee

    $395
  • Recommended Credit
    Credit ranges are a variation of FICO© Score 8, one of many types of credit scores lenders may use when considering your credit card application.

    740-850
    Excellent

Why We Chose It

The Capital One Venture X card is one of the best all-round travel credit cards ever launched. Not only is it offering a tremendous welcome bonus, but cardholders can earn tons of miles on everyday spending and receive a 10,000-mile anniversary bonus to boot. Its annual fee is $395, but cardholders can count on up to $300 in statement credits toward travel booked through Capital One Travel each year and other valuable benefits like access to Priority Pass lounges and Capital One’s own growing family of airport lounges.

Pros

  • Excellent welcome offer worth 75,000 miles after you spend $4,000 on purchases in the first three months.
  • Up to $300 in annual travel statement credits toward bookings make through Capital One Travel.
  • 10,000 bonus miles (worth $100 toward travel) each account anniversary.

Cons

  • The $395 annual fee might be expensive for some, but this card’s benefits provide much more value than that.
  • If you don’t travel frequently, this might not be the best card for you.
  • Earn 75,000 bonus miles when you spend $4,000 on purchases in the first 3 months from account opening, equal to $750 in travel
  • Receive up to $300 back annually as statement credits for bookings through Capital One Travel, where you'll get Capital One's best prices on thousands of options
  • Get 10,000 bonus miles (equal to $100 towards travel) every year, starting on your first anniversary
  • Earn unlimited 10X miles on hotels and rental cars booked through Capital One Travel and 5X miles on flights booked through Capital One Travel
  • Earn unlimited 2X miles on all other purchases
  • Unlimited complimentary access for you and two guests to 1,400+ lounges, including Capital One Lounges and our Partner Lounge Network
  • Receive up to a $100 credit for Global Entry or TSA PreCheck®
  • Use your Venture X miles to easily cover travel expenses, including flights, hotels, rental cars and more—you can even transfer your miles to your choice of 15+ travel loyalty programs
  • Named editors' choice for "Best New Credit Card of 2021" by The Points Guy
  • Earn 10 miles per dollar when you book on Turo, the world's largest car sharing marketplace, through May 16, 2023