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I Save Hundreds of Dollars Each Year With Gift Cards; Here’s My Secret

Buying gift cards? This is how I use the right credit cards to earn double and triple rewards.

Advertiser Disclosure: Most products in our articles are from partners who may provide us with compensation. However, opinions expressed here are author's alone, not those of any bank, credit card issuer, airline or hotel chain.

Editor’s Note: It’s worth noting that some card issuers have instituted policies banning gift card purchases from earning rewards. This is largely due to abuse of the system. However, your experience will vary depending on the credit card issuer, dollar amount and frequency of gift card purchases and retail outlet. Consult the terms and conditions of your card for complete details.

As a certified credit expert and founder of, I’ve been saving hundreds of dollars on my family’s household spending each year using this gift card strategy. And now, I’ll share it with you.

Using a rewards credit card when you buy gift cards can help you earn valuable points, miles or cash-back perks. Yet all rewards credit cards aren’t equal. One card might give more rewards for dining or travel purchases, while another card might reward you more for grocery or gas purchases. If you want to maximize your reward-earning potential, it’s important to choose the right credit card for each purchase.

Personally, I try to never use a credit card that gives me just 1 point per purchase (or 1% cash back) for any transaction. While you won’t find a credit card that pays higher rewards specifically for gift card purchases, there are several cards that offer higher category spending bonuses at locations that sell gift cards.

Below are three of my favorites.

1. Ink Business Cash® Credit Card

Ink Business Cash Credit Card
Credit: Chase

The Ink Business Cash Credit Card offers 5% cash back at office supply stores. 

Perhaps the most valuable card you can use to earn extra cash back or points on gift card purchases is the Ink Business Cash. (If you have the older Ink Business Plus Card—now closed to new applications—this card features the same category bonus.)

The Ink Business Cash Credit Card gives you 5% cash back on purchases made from office supply stores (up to $25,000 per year). So, if you purchase a $100 Lowes gift card from an office supply store like Staples using this credit card, you earn an extra $5 cash back for yourself.

How to boost the earnings

While a 5% rewards return is already impressive, boost your earning power even more if you have the Chase Sapphire Preferred® Card or Chase Sapphire Reserve®. When you earn cash back rewards on your Ink Business Cash card, they’re calculated as points. One dollar cash back equals 100 points.

You can then redeem points for cash back or transfer them to a Chase Ultimate Rewards card. By moving cash-back rewards to your Sapphire Reserve, you can redeem them for 50% more value (for travel purchased through the Chase Ultimate Rewards portal) or transfer them to Chase’s wide selection of airline and hotel partners. And even now, during the pandemic, both cards offer new ways to use your points through Chase’s Pay Yourself Back program.

2. Chase Freedom® Flex Card

Chase Freedom Flex Card
Credit: Chase

The Chase Freedom Flex Card offers 5x points in rotating categories each quarter (up to $1,500).

Formerly known as the Chase Freedom®, the Chase Freedom® Flex Card features rotating bonus categories each quarter where you can earn 5x cash back on up to $1,500 in purchases. In the past, those bonus categories have included grocery stores, drug stores and gas stations—locations where you can easily make a gift card purchase.

Through the end of 2020, Chase Freedom Flex’s current category bonuses include:

  • Walmart
  • PayPal

Both PayPal and Walmart have a wide selection of gift cards both in-store and online.

The Chase Freedom is worth mentioning as a good potential option for the future since its rotating categories have routinely included locations where you can buy gift cards in the past.

How to boost the earnings

Like the Ink Business Cash Card, you can transfer cash back points earned on your Chase Freedom Flex Card to a Chase Sapphire Preferred or Chase Sapphire Reserve. Once transferred, you can use the Chase Ultimate Rewards portal to redeem the points for more value—50% more with Sapphire Reserve or 25% more with Sapphire Preferred.

Often, however, you’ll get the best value when you transfer points to a Chase airline or hotel partner.

3. The Amex EveryDay® Preferred Credit Card

The Amex EveryDay Preferred Credit Card
Credit: American Express

The Amex Everyday Preferred Credit Card offers 3x points at U.S. grocery stores (Up to $6,000 Annually)

Another place to easily find gift cards for a number of retailers is at your local grocery store. If you have a credit card like Amex EveryDay Preferred Credit Card, which earns higher rewards on grocery purchases, using the card at grocery stores could be a smart choice for holiday gift card purchases.

How to boost the earnings

When you use your Amex EveryDay Preferred card at least 30 times in a month, you’ll qualify for 50% more Membership Reward points. So, instead of a gift card purchase at a grocery store earning you 3x points, it could earn you 4.5x points. You can also transfer any American Express Membership Rewards points you earn to a partner hotel or airline and potentially get more value when you’re ready to redeem them.

Before You Begin Getting Deals and Saving Money on Gift Cards

You should only use credit cards to earn rewards if you can commit to paying off your full statement balance every month. Otherwise, credit card rewards simply aren’t worth the trade off.

When you revolve an outstanding balance on your credit card from month to month, you’ll get hit with interest fees. Interest fees can reduce or wipe out the value of any credit card rewards you earn. Plus, a higher account balance on your credit report could raise your balance-to-limit ratio (aka revolving utilization). This triggers a drop in your credit score.

But if you use your credit cards the right way and pay them off in full (and on time) every month, credit card rewards can be extremely valuable. You can redeem credit card points for my favorite type of reward—free travel—or use them for something else that appeals to you.


Can you earn credit card points for travel from gift card purchases?

This will depend on the card issuer’s rules on rewards from gift card purchases. If your card issuer allows gift card purchases for credit card points, then it is possible to use these points for travel rewards such as airline miles, hotels or car rentals.

You’ll need to check your credit card terms carefully because some companies specifically say that gift card purchases do not qualify for travel rewards. It may also depend on which store you purchase the gift card from, since your card may limit the rewards to participating retailers. 

How can buying gift cards earn you rewards?

Some credit cards may allow cardholders to earn bonus rewards at specific stores, retailers, or service providers. This may include gift card purchases from a participating retailer as well, potentially allowing you to earn extra rewards from buying gift cards.

Can you buy gift cards with a credit card?

Yes, you can buy gift cards with a credit card, but not all card issuers will count gift card purchases towards rewards.  

Additionally, your card company may frown upon indiscriminate purchasing of gift cards to “work” the system, and the result could negatively affect future card applications. Credit card companies may monitor whether your gift card purchases coincide with a “legitimate” purchase from a retailer or whether it seems you’re just purchasing large quantities of gift cards to build up points.

When should you redeem credit card rewards?

The answer is different for each situation. You can usually use your rewards whenever you want to, but there are some scenarios where it’s best to redeem your rewards right away. For example, if your rewards will expire, make sure to redeem them before they do. 

Additionally, sometimes there are incentives or offers to use your rewards on certain perks, such as deals on travel. Timing your redemptions around these incentives may be a smart move. And finally, if you plan to cancel your card, make sure to use your rewards before ending the program.

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While we work hard on our research, we do not always provide a complete listing of all available offers from credit-card companies and banks. And because offers can change, we cannot guarantee that our information will always be up to date, so we encourage you to verify all the terms and conditions of any financial product before you apply.

Michelle Black
Michelle Black
Michelle Black is founder of and Michelle is a leading credit card journalist with over a decade and a half of experience in the financial industry. She’s an expert on credit reporting, credit scoring, identity theft, budgeting, small business, and debt eradication. Michelle is also a certified credit expert witness and personal finance writer.

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