While it's rarely a good idea to redeem your credit card rewards to buy a gift card, you should maximize your 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. Here are some of our favorites.
Best cards for purchasing gift cards
Each of these cards comes from a different issuer, so regardless of where your issuer preferences lay you should be able to find the right pick for you.
- Ink Business Cash® Credit Card
- American Express® Gold Card
- Bank of America® Customized Cash Rewards credit card
- Costco Anywhere Visa® Card by Citi (see rates and fees)
Let's see how these cards compare.
Comparing the best cards for gift cards
| Card | Category bonus on merchants that sell gift cards | Return on spend (based on TPG's August 2024 valuations) | Welcome bonus |
|---|---|---|---|
| Ink Business Cash Credit Card | 5% cash back (or 5 points per dollar) on the first $25,000 in spend at office supply stores each account anniversary year | 5%-10.25% | Earn $350 after spending $3,000 on purchases in the first 3 months your account is open. Plus, earn an additional $400 after spending $6,000 on purchases in the first 6 months after account opening. |
| American Express Gold Card | 4 points per dollar on up to $25,000 per calendar year at U.S. supermarkets; then 1 point per dollar | 8% | Earn 60,000 bonus points after spending $6,000 on eligible purchases with your new card within the first six months. Plus, receive 20% back in statement credits on eligible purchases made at restaurants worldwide within the first 6 months (up to $100 back). Offer ends 11/6. Terms apply. |
| Bank of America Customized Cash Rewards credit card | 3% cash back on the first $2,500 per quarter in combined purchases in the category of your choosing (then 1%) | 3% | Earn a $200 cash bonus after spending $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%-4% | N/A |
Let's take a deeper look at the details of each of our top picks.
Ink Business Cash
If your small business wants to purchase gift cards for employee gifts, purchasing them with the Ink Business Cash is a good idea.
Annual fee: $0
Welcome offer: Earn $350 after spending $3,000 on purchases in the first 3 months your account is open. Plus, earn an additional $400 after spending $6,000 on purchases in the first 6 months after account opening.
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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 another select Chase 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 via Chase's transfer partners.
Beyond that, the Ink Business Cash Credit Card is the best business credit card for office supplies on the market today.
To learn more, check out our full review of the Ink Business Cash.
Amex Gold Card
Since the Amex Gold has a fantastic earning rate on U.S. supermarket purchases (up to the first $25,000 in spending per calendar year), it's a great option for purchasing gift cards.
Annual fee: $325 (see rates and fees)
Welcome offer: Earn 60,000 bonus points after spending $6,000 on eligible purchases with your new card within the first six months. Plus, receive 20% back in statement credits on eligible purchases made at restaurants worldwide within the first 6 months (up to $100 back). Offer ends 11/6. Terms apply.
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), resulting in an 8% return based on TPG's August 2024 valuations.
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.
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.
To learn more, check out our full review of the Amex Gold.
Bank of America Customized Cash Rewards credit card
If you're a Bank of America Preferred Rewards® member, the Customized Cash Rewards is one of the best cards for gift card purchases.
Annual fee: $0
Welcome offer: Earn a $200 cash rewards bonus after spending $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, gas stations 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 physical gift cards.
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.
To learn more, check out our full review of the Bank of America Customized Cash Rewards.
Costco Anywhere Visa by Citi
If Costco is your place of choice for purchasing gift cards, the Costco Anywhere Visa is the right credit card for you.
Annual fee: $0 if you have a Costco membership
Welcome offer: 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 those 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.
To learn more, check out our full review of the Costco Anywhere Visa.
Can you buy gift cards with a credit card?
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 check the stipulations regarding gift card purchases on your account beforehand.
Issuers often frown upon purchasing gift cards to meet the spending requirement for a welcome offer, so exercise caution here. In the worst-case scenario, your welcome offer could be clawed back, or your account could even be shut down.
According to CNN, Americans have a collective $21 billion in unused gift cards. 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?
The most obvious reason to buy gift cards is to give them 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, many 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. However, gift cards can be bought at locations that do earn rewards.
If you buy a gift card to Nordstrom 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?
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 ensure that you're getting a solid redemption value from each point or mile, and gift cards rarely give you the best reward value.
When it comes to transferable currencies like Amex Membership Rewards or Chase Ultimate Rewards, you're typically only getting between 0.7 cents and 1.1 cents of value from each point. But your points are also easily worth more than that when you maximize each of the issuer's 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
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, like Chase's or Amex's.
So, where you would have gotten no rewards from restocking your favorite concealer and haircare products by buying in-store, you could get bonus points through that respective shopping portal.
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.
Apply here: Ink Business Cash
Apply here: Amex Gold
Apply here: Bank of America Customized Cash Rewards
Apply here: Costco Anywhere Visa by Citi
Related: The best credit cards for Target purchases
For rates and fees of the Amex Gold Card, click here.
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.
