Gift cards have become a popular gift item over the years According to the National Retail Federation’s annual survey, gift cards were the most requested gift item for the 13th year in a row in 2021. But what if you have some unused gift cards lying around and want to put them to good use? Can you use gift cards to pay off your credit card bill?
Unfortunately, the short answer is no. You cannot directly use a gift card to make a payment on your credit card. Credit card companies do not allow you to enter gift card information when making a payment. However, that doesn’t mean your gift cards have to sit around collecting dust. With a few extra steps, you can indirectly use gift cards to pay your credit card bill.
In this article, we’ll explain why you can’t directly pay a credit card with a gift card. We’ll also go over the most common workarounds people use to indirectly pay their credit card bill with gift cards. By the end, you’ll understand your options and have actionable tips for putting your unused gift cards to work.
Why You Can’t Pay A Credit Card Bill Directly With A Gift Card
When it comes time to pay your credit card bill each month, you have several options. Most credit card companies allow you to pay your bill
- Online
- By phone
- By mail
- In person at a branch
- By setting up autopay
No matter which method you choose, the credit card company will ask you for details about where the payment funds are coming from. For example, you may enter:
- Checking account number and routing number
- Debit card number
- Prepaid debit card number
- Another credit card number
But there is nowhere to enter gift card information. That’s because gift cards are not linked to your personal finances or identity. The credit card company has no way to verify a gift card belongs to you or that sufficient funds are available.
Gift cards also aren’t linked to a bank account so there is no account number or routing number associated with them. And most gift cards aren’t affiliated with major payment processors like Visa, Mastercard American Express, or Discover. So there is no standard card number that can be used for payments.
For these reasons, credit card companies simply don’t allow you to use gift cards to directly pay your bill online, over the phone, by mail, or in person.
Workarounds To Indirectly Use Gift Cards For Credit Card Payments
There are still things you can do if you can’t use a gift card to pay your credit card bill directly. Many people find ways to use gift cards to pay for things with their credit cards without directly using them:
Sell the gift card
One option is to sell your unused gift cards and receive cash in return. Here are some common ways to sell gift cards:
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Gift card exchange services: You can get cash for your old gift cards on sites like CardCash, Raise, and GiftCardSpread. For example, you might get 80% of the card’s value in cash. After that, you can put the money in your bank account and use it to pay off your credit card.
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Sites like Craigslist, OfferUp, Facebook Marketplace, and Nextdoor let people buy and sell things with each other. Set up a time to meet up with the person who wants to buy your gift card and exchange it for cash at a price you both agree on.
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Buy-back programs – Some retailers like Target and Walmart allow you to turn in gift cards to their store in exchange for cash. Malls may also have gift card buy-back kiosks. You typically don’t get the full card value, but can convert the gift card to cash.
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Re-gifting – If you have a gift card to a place you don’t frequent, consider regifting it. You can trade gift cards with a family member or friend who may be able to use your card. In exchange, ask them to give you cash or a gift card to a place you’ll use.
Selling or trading in your gift cards takes a bit of extra work. But in the end, it allows you to convert those unused cards into cash you can use toward your credit card payment.
Add it to a digital wallet
If your gift card is affiliated with a major payment processor like Visa, Mastercard, American Express, or Discover, you may be able to add it to a digital wallet.
Apps like Apple Pay, Google Pay, Samsung Pay, and the gift card issuer’s app allow you to store your gift card information. You can then use your phone or smartwatch to pay in stores that accept contactless payments.
To get the gift card funds into your bank account, use your digital wallet to pay for everyday purchases you’d normally use cash or your debit card for. Then, take the money you saved by using your gift card balance and make an extra payment to your credit card.
This method turns your gift card into usable cash without needing to sell the card. Just be aware that some digital wallets charge fees or set limits on gift cards added to the app.
Use it for another bill
While credit card companies won’t directly accept gift cards, many other service providers will. If you have bills you normally pay from your checking account, see if the company allows gift card payments.
For example, gift cards affiliated with major payment processors can often be used to pay:
- Utilities like electricity, gas, water, cable, and internet bills
- Cell phone and landline phone bills
- Insurance bills
- Subscriptions like Netflix, Hulu, Spotify, newspaper subscriptions, etc.
- Rent payments if your landlord or property manager accepts gift cards
When you use a gift card to cover bills you’d otherwise pay from your bank account, you free up your own money to put toward the credit card.
Should You Pay Credit Cards With Gift Cards: Pros and Cons
Paying a credit card bill with a gift card takes some extra steps. But it allows you to put those unused gift card funds to good use. Here are some pros and cons to consider:
Pros
- Allows you to put old, forgotten gift cards to use
- Helps you save on credit card interest charges
- Frees up cash in your budget that can be put toward the credit card balance
- Provides a way to reduce your overall credit card debt
- Convenient if you have lots of small unused gift cards lying around
Cons
- Usually can’t pay your credit card directly, requiring extra steps
- You may lose a percentage of the value when selling gift cards
- It takes effort to sell, trade, or redeem gift cards
- Not useful if you only have one or two higher-value cards you want to redeem
For people with a number of old small-balance gift cards, the pros often outweigh the cons. But evaluate your own situation carefully before going down this route.
Tips for Successfully Using Gift Cards for Credit Card Payments
If you want to utilize your unused gift cards to help pay down credit card debt, keep these tips in mind:
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Make sure the gift cards haven’t expired – Most expire 6 to 24 months after purchase.
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Check the balance – Know exactly how much you have available on each card.
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See if you can trade gift cards with family and friends before selling them to avoid fees.
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Research sites’ reputations if selling gift cards online – Stick to well-known secure platforms.
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Compare buy-back rates and choose the best value if trading in cards.
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Add up small gift cards to redeem for one larger card if allowed.
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Use gift cards strategically for bills so you free up cash for credit card payments.
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Don’t overpay bills with gift cards – Only use amounts you were already budgeting for those expenses.
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Make your credit card payment as soon as possible after redeeming gift cards.
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Avoid spending cash freed up by using gift cards – Put it directly toward your credit card balance.
With a clear plan and smart usage, you can strategically tap into unused gift card funds to help pay off your credit card while minimizing any losses.
Frequently Asked Questions About Paying Credit Cards With Gift Cards
Here are answers to some common questions people have about using gift cards to pay credit card bills:
Can I use a Visa gift card to pay my Visa credit card?
Unfortunately, no. Even gift cards affiliated with major payment processors like Visa and Mastercard cannot be used to directly pay a credit card from the same brand.
What if I have a prepaid debit card – can I pay my credit card bill with that?
Yes, a prepaid debit card affiliated with a payment processor brand can be used to pay a credit card bill. When making a payment, you would enter the prepaid card’s number and other details just like a regular debit card attached to a bank account.
How much value will I lose if I sell my gift cards?
It depends on the gift card and where you sell it. Expect to lose
Special Card Features
All prepaid cards come with their own terms and special provisions as decided by the card issuer. Some prepaid card providers may offer special opportunities to make bill payments from a cardholder’s account through the issuer’s website. Cards can also come with some special features that make it more convenient to transfer funds.
The Western Union NetSpend Prepaid MasterCard, for example, maintains a site on which cardholders can easily make bill payments. Some additional fees may be required.
Many prepaid cards offered by MasterCard and Visa allow for card-to-card transfers for cards of the same network brand. For example, a MyVanilla Prepaid Visa Card allows cardholders to transfer funds to other MyVanilla Prepaid Visa Cards, and for no fee. Most prepaid cards do not allow transfers between cards of different brands, however, or between prepaid cards and regular credit cards, even if they are from the same network.
Cards such as the Western Union NetSpend Prepaid MasterCard allow users to send and receive Western Union money transfers using their cards. There is generally no fee for receiving Western Union money transfers. There are, however, varying fees for sending Western Union money transfers.
Can You Pay Bills With a Prepaid Debit Card?
Yes, bill payments can be made with a prepaid debit card if there are sufficient funds loaded onto the card. An important thing to take note of when seeking to make any bill payment with a prepaid card of any kind is the card’s processor.
All prepaid debit cards partner with one of the four major payment card processors: Visa, MasterCard, Discover, or American Express. Generally, the card processor will dictate whether or not an electronic payment card is accepted by a company for a bill payment. Store gift cards typically cant be used for bill payment unless with that specific retailer.
Beyond that, most prepaid cards will work in the same manner that any regular payment card will. If the card’s processor is accepted, payments may be made on a website, on the telephone with representatives, or by filling out a form included with a paper bill in the mail and returning it through the postal service. Transactional fees are usually not necessary although some companies may charge for payments over the phone or express payments.