Earning points is almost as fun and rewarding as redeeming those travel points for free flights or hotel rooms. And redeeming points for free travel is almost as fun as the travel itself. OK, the travel is more fun!
One of the powerful ways I earn extra points for travel is by buying Visa and Mastercard gift cards.
In this article I focus on using credit cards offering bonus points at stores where I buy Visa and Mastercard gift cards.
Earn Extra Points for Travel With Visa and Mastercard Gift Cards
Earning and using points is one of the most popular ways to save money on travel.
I am not the only one who loves to travel for free by using points. Among travel experts I interviewed, points was the most common answer given for “top 3 money-saving tips.”
While buying gift cards for others is quite acceptable, I buy a lot of gift cards for myself. I will tell you why I do, how I buy and use them, and how I earn a lot of points.
What Are Visa and Mastercard Gift Cards?
Next time you visit a grocery, office supply, or home improvement store, find the gift card kiosk and note the variety of gift cards.
Basically, two types of gift cards will be displayed:
- Gift cards that can be used anywhere—Visa and Mastercard gift cards
- Gift cards that can only be used in one place—retail gift cards
This article focuses exclusively on the first type—Visa and Mastercard gift cards. But also learn how to get free travel from retail gift cards.
The main differences between Visa/Mastercard gift cards and retail gift cards are:
- Visa and Mastercard gift cards can be used almost everywhere while retail gift cards are limited by the brand (e.g., Amazon cards can only be used on Amazon.com)
- Mastercard and Visa gift cards require a fee to purchase while retail gift cards are fee-free. I will show how to justify and offset the Mastercard/Visa gift card fees.
Reasons to Buy Visa and Mastercard Gift Cards
The main reason I buy Mastercard/Visa gift cards is to increase the numbers of points I can earn. A lot! The more points I accrue, the more free travel I can get. “Learn. Earn. Burn.” is a travel points mantra.
The gift cards I buy and use are for bills I need to pay soon or for purchases I will make in the near future.
I only buy Visa and Mastercard gift cards that I will use and which earn more points than I receive from other sources.
As an example, I earn one point per dollar (1X) with my credit card when paying for my auto insurance but I earn four points per dollar (4X) when I buy Visa/Mastercard gift cards.
McCool Travel tip: learn the point bonuses issued by your various credit cards. For instance, if a credit card offers 5X for fuel purchases then it is not worth buying Visa and Mastercard gift cards for 4X.
Earning Bonus Points From Visa and Mastercard Gift Cards
My summary for earning bonus points by using Mastercard and Visa gift cards:
- Determine which of your credit cards offer bonus points (beyond one point per dollar) at stores where you can buy Visa and Mastercard gift cards.
- Buy Visa/Mastercard gift cards with your bonus point earning credit card.
- Use the gift cards for purchases instead of credit card, cash, or check.
- Repeat steps 1-3 and earn a ton of bonus points.
Two examples appear below in the next section.
For most of my gift card purchases I use two credit cards—American Express Gold Card or Chase Ink Preferred Business Card.
When I use American Express Gold Card at grocery stores, I earn four points per dollar (4X). I earn 5X on office supply store purchases with my Chase Ink card.
Note that if you click the above two links and apply for either credit card (and are accepted), I receive bonus points. Thank you.
Examples: Bonus Points From Visa and Mastercard Gift Cards
You have an upcoming $500 insurance bill. You usually pay with a credit card that gives you one point per dollar.
- Pay with usual credit card and earn 500 points
- Use AMEX Gold to buy $500 Visa or Mastercard gift card from grocery store and earn 2,000 points
If you do this every month, you will earn an extra 18,000 points per year.
Or you plan to buy a new $1,500 refrigerator.
- Pay with usual credit card and earn 1,500 points
- Use Chase Ink to buy $1,500 in gift cards from Staples and earn 7,500 points
Using gift cards for this one-time purchase, you will earn an extra 6,000 points.
So, what are points worth?
Where I Buy Visa and Mastercard Gift Cards
I buy most of my gift cards at grocery stores. Using my American Express Gold Card, I earn four points per dollar (4X) on grocery store purchases, including gift cards.
Five different grocery store chains within a few minutes of my house sell gift cards. And I typically buy groceries two or three times a week so it is very convenient for me to add a gift card to my order.
Other places to buy Visa and Mastercard gift cards include wherever you earn bonus points with your credit card. Your credit card may offer bonus points for purchases from drugstores, gas stations, or a specific store (such as Kohls).
Why do I not buy Visa and Mastercard gift cards at an office supply store and earn five points instead of four points?
Office supply stores are over 25 minutes from my house and in locations I rarely go to. But when I am near an Office Depot or Staples, I often do pop in and buy gift cards—usually when I am on trips.
What are credit card points worth?
My baseline value is one point equals one cent. So, 1,000 credit card points are worth $10.
In the $1,500 example above, the bonus points (6,000) on top of a basic credit card would be worth $60. Is it worth $60 to buy and use $1,500 in gift cards? For me, yes it is, when the process is easy and convenient.
BUT my goal is to redeem credit card points for a higher value than merely one cent. I recently redeemed 50,000 points for $2,000 worth of flights. That translates to six cents per point and would value those 6,000 points at $240 (instead of $60).
Read more about the power of using points for free travel: My 4 Continent, Free Flight Adventure.
But what about Visa and Mastercard Gift Card Fees?
Unlike with retail gift cards, Visa and Mastercard gift cards have fees so I need to account for them.
The typical fee to purchase a Mastercard or Visa gift card is $5.95. These gift cards are available in various denominations, including $100, $200, and $500. But the fee is the same on all values.
So, I will only buy $500 Visa/Mastercard gift cards in order to maximize the value.
In that first example above, I think of the process as spending $6—the $5.95 fee—to earn an extra 1,500 points. If I value those 1,500 points at $15 (one cent per point), then it is worth it. But a $100 gift card with a $6 fee is not worth it because the value of the points ($3 for 300 extra points) is less than the fee.
McCool Travel note: office supply stores frequently have promotions where they waive the fees on either Visa or Mastercard gift cards. Also look for other promos, such as grocery stores offering cash back on gift card purchases. My local grocery store offers promos such as $10 off $250 or more gift card purchase (usually in December).
Bonus Points and Visa and Mastercard Gift Cards FAQ
Do I have to spend extra money to earn bonus points?
In most cases you have to pay a fee to buy a Mastercard gift card or a Visa gift card. But the additional points earned on your credit card can more than offset that gift card fee.
What purchases can I make with a Mastercard or Visa gift card?
A Mastercard or Visa gift card can be used almost everywhere. Note in the top photo above that Visa gift cards and Mastercard gift cards have the word Debit on them. They can act as debit cards—but I use them as credit cards (both ways only up to the face value or the remaining balance).
I have used MC/Visa gift cards at farmers markets, retail stores, gas stations, flower stands, food trucks, and more. But I most frequently use Visa and Mastercard gift cards to pay online bills, such as insurance (health, auto, homeowners), HOA fees, medical bills, and dental bills.
Many auto dealers will accept credit cards up to a certain amount (usually under $5,000). When buying a new car, ask—they might be more flexible with gift cards.
Some vendors charge a credit card convenience fee and I generally will not use gift cards them. Determine whether it makes sense for you.
Which Visa/Mastercard gift cards should I not buy?
I typically do not buy reloadable Visa or Mastercard gift cards because no bonus points are issued to reload those cards.
I suggest not buying gift cards when you can earn the same points (or more) in other ways. I do not buy travel gift cards—such as for airlines, hotels, and cruise lines—when I earn more points with my credit card.
Are there risks to buying gift cards?
Losing a gift card is a risk and one of my biggest worries. That is why I only buy gift cards that I intend to use soon.
Other risks for buying gift cards can include theft, loss, and fraud. Make sure that the security information has not been tampered with before you buy them.
Some gift cards charge a maintenance fee (like $1 a month), generally after one year. Yet another reason I suggest only buying gift cards that you will use right away.
Is there a maximum number of points that can be earned for gift card purchases?
OK, big spender. Thinking big. I love that.
Both of the cards listed above have a maximum annual spending limit of $25,000 for categories (such as groceries or office supplies). So, I could earn a maximum of 100,000 AMEX and 125,000 Chase points every year with the bonus points. Purchases above that amount will only earn one point per dollar.
I have not yet reached the spending limit on either credit card. I shall try harder this year.
Besides points, are there other benefits to buying Visa and Mastercard gift cards?
Another benefit is that gift card purchases can be included in customer loyalty accounts. My local grocery store issues a $20 credit when I collect 1,200 points. If the store offers six points per dollar on gift cards, I earn a $45 credit when buying a $500 gift card. That 9% “discount” is in addition to the 2,000 points I earn on my AMEX card.
Do you buy gift cards for bonus points? Let me know.
Please share my article with your family, friends, and coworkers who share our passion to travel happier.