Personal Finance

How to Buy Gift Cards and Maximize Your Rewards

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For some, gift cards are the perfect present while others find them to be the choice of last resort when they have run out of ideas. However you arrived at your decision to purchase a gift card, you can earn tremendous rewards for yourself when you purchase gift cards using a credit card.

Maximizing category bonuses

The key to earning the most points, miles, and cash back from your gift card purchases is to understand how different credit cards offer bonuses for purchases from specific types of retailers. Then it is simply a matter of finding desirable gift cards at stores that fit within the designated merchant categories.

Here are some of the most popular merchant categories where gift cards can be purchased, and the most widely held credit cards that offer bonus rewards there:

Check Your Credit For FreeGrocery stores.  Supermarkets have some of the most extensive selections of gift cards and there are many credit cards that offer extra rewards for purchases there.

  • The American Express Blue Cash Preferred offers 6% on up to $6,000 spent annually at grocery stores.
  • The Blue Cash Everyday card from American Express offers 3% cash back on up to $6,000 spent annually at grocery stores.
  • The American Express Hilton HHonors cards also offer 6x rewards at supermerkets.
  • The American Express Premier Rewards Gold offers double Membership Rewards points.
  • Chase’s Disney Premier card offers double Disney Rewards Dollars.

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Office supply stores. Major office supply stores such as Staples, Office Max, and Office Depot sell a wide variety of gift cards.

  • The American Express SimplyCash card offers 5% cash back rewards from office supply stores.
  • The Chase Ink line of business cards offer 5x rewards in cash back or Ultimate Rewards points.
  • The CitiBusiness AAdvantage World Mastercard offers double rewards.
  • Chase MileagePlus Explorer Card for Business offers double rewards.

Drug stores: Most drug stores have a large gift card rack prominently displayed.

  • The American Express Hilton HHonors cards offer 6x rewards for drug store purchases.
  • Chase’s Amazon.com rewards card offers double points.

Department stores: Some department stores such as Sears carry a selection of gift cards.

  • The American Express Blue Cash Preferred offers 3% cash back for purchases from department stores.

Other opportunities

Another way to maximize your credit card rewards is by taking advantage of bonus categories of spending that rotate each quarter.

  • Chase Freedom: 5X, up to $1500 per quarter in spend. This quarter’s bonus categories include purchases from airlines and hotels as well as retailers Best Buy and Kohl’s.
  • Discover: 5% cash back on up to $1,500 spent per quarter. Eligible retailers this quarter include department stores and all online shopping until the end of the year.
  • Citi Dividend Platinum Select: offers 5% on merchants each quarter, up to $300 cash back per year. The current bonus categories this quarter include Macy’s, Electronics stores and Toy stores.

[Credit Cards: Research and compare rewards credit cards at Credit.com]

Outside of gift card racks, you can always earn rewards for purchasing gift cards directly from retailers that are included within bonus categories. These can include restaurants, department stores and travel providers.

To be sure, giving a gift is an act of generosity and a way of expressing yourself to your friends and loved ones. But if you were going to purchase a gift card, it is only smart to receive the most credit card rewards possible.

Image: Maegan Tintari, via Flickr

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