Before you start making purchases using your credit card to buy gift cards, there are some things you should know. Buying them with your card makes it much more difficult for someone to use your card fraudulently. Also, some card issuers have terms that say you can’t use them to earn rewards. Some may allow you to do this, but if they don’t, you’ll have no official ground to stand on if someone steals your card.
Generic gift cards have higher fees than Amex gift cards
As the name implies, generic gift cards are not Amex. Generic cards have fees as well. These fees vary by issuer and denomination. Generally, higher denomination cards have more fees than lower denomination ones. However, the fee charged by Amex is flat at $3.95, while fees charged by individual retailers may vary. These cards are very similar to prepaid debit cards and are not limited to any one particular store.
When choosing a gift card, consider whether you need a gift card for online shopping, in-store shopping, or both. A generic gift card may not give you the rewards you want and can be used for a different purpose. It might also be worth considering a gift card that has a closed-loop structure. These cards can only be used at a single store and often have no fees.
Generic gift cards can be used to pay for a meal
A generic gift card can be used almost anywhere. You can use it to pay for a meal in any downtown business, or at restaurants. Generic cards can be used in restaurants as well, such as Panera Bread, Chipotle, or The Cheesecake Factory. There are a few downsides to generic cards, however. Here are some of them:
A cash advance is not the best way to spend a gift card, since it does not earn rewards and charges a high interest rate. Before you use a generic gift card, be sure to double check that you are not taking out a cash advance. It is also important to note that many banks have different tolerance levels for gift card spending, so you might want to gradually ramp up your spending.
Buying gift cards with a credit card makes it harder for people to use stolen cards
Using a credit card to purchase gift cards is safer than using a debit or cash card. Many credit card companies will use cybersecurity defense systems to identify unauthorized transactions. If your gift card is stolen or lost, contact your card issuer and request reimbursement. Even if the gift card is legitimate, criminals can get access to your card’s PIN and numbers by hacking into your computer. To protect yourself, use strong passwords and enable multifactor authentication.
Cybercriminals use gift cards as currency. Because they’re easy to buy and untraceable, they’re a convenient target for fraudsters. Some of them use little-known websites to advertise gift cards from popular retailers at steep discounts. These websites are likely stealing your payment card number or personal information. Even if you’re buying a legitimate gift card with your credit card, it’s not uncommon for the retailer to have bought it with stolen credit cards.
Avoid cash advances to buy gift cards
Credit card issuers may allow you to purchase gift cards with your gift card, but do so at your own risk. Credit card issuers may close your account if you use a manufactured purchase or cash advance. It is not always easy to avoid such restrictions, but some of them may be in place. In addition, many stores may restrict the purchase of gift cards before they introduced EMV(r) chips. These chips help to reduce fraud risks, but they may not be in place everywhere.
One reason to avoid cash advances to buy gift cards is the high interest rates and fees. No one wants to pay interest on a high interest rate for cash they don’t have. Cash advances are either a flat rate charge or a percentage of the amount accessed. For example, a $5 cash advance would cost you $25. You may be surprised by the amount of interest you will have to pay. This is why many experts suggest avoiding cash advances when buying gift cards.