Yes, you can buy gift cards with a Target credit card, but the rewards work differently than they do for regular purchases
You can walk into a Target store or order online and buy gift cards using your Target RedCard (the store credit card) or your Target Mastercard. The transaction will go through without a problem. However, the rewards you earn depend on which type of gift card you're buying and which card you use.
If you buy a Target gift card with your Target RedCard, you earn 5% back on that purchase — the same rate as regular Target purchases. If you buy a non-Target gift card (like an Amazon, Visa, or restaurant gift card) with your Target RedCard, you earn 1% back instead. With the Target Mastercard, you earn 1% to 3% depending on the category, but gift cards typically fall into the 1% category.
The key difference is that gift cards are treated as a product you're purchasing, not as a way to load money onto a card. This matters because some credit card companies restrict rewards on certain types of transactions — but Target's policy is straightforward about gift cards.
Key Takeaways
- Target RedCard holders earn 5% back when buying Target gift cards and 1% back when buying other brands' gift cards.
- Target Mastercard holders earn 1% to 3% depending on the category, with most gift cards earning 1%.
- You can buy gift cards in-store, online, or by phone using either Target credit card without restrictions.
- Gift card purchases count as regular transactions for credit reporting and payment purposes — they do not trigger cash advance fees or special handling.
How Target RedCard rewards work on gift cards
The Target RedCard is a store card that gives you 5% off most purchases at Target. When you buy a Target-branded gift card — whether it's a physical card, a digital code, or a gift card for a specific dollar amount — that 5% discount applies to the purchase price. So if you buy a $100 Target gift card, you pay $95 and the recipient gets the full $100 to spend.
This is one of the few ways to get a discount on gift cards at all. Most retailers do not offer rewards on gift card purchases, so the 5% back is a real advantage if you're buying gifts for others or stocking up for your own use later.
When you buy a non-Target gift card at Target — such as an iTunes card, a Visa gift card, or a restaurant chain gift card — the RedCard rewards drop to 1%. This is because Target treats those purchases differently in their rewards system. You still earn something, but not at the premium rate.
Target Mastercard rewards on gift cards
The Target Mastercard is a general-purpose credit card that works anywhere Mastercard is accepted, not just at Target. It earns rewards in different categories: 3% at Target and Target.com, 2% at gas stations and restaurants, and 1% everywhere else.
Gift card purchases typically fall into the 1% category when you use the Mastercard, whether you're buying them at Target or anywhere else. This is because the card's rewards structure is based on the merchant category, and gift cards are usually coded as retail purchases without the Target-specific boost.
If you're trying to maximize rewards, the Target RedCard is the better choice for gift card purchases at Target. The Mastercard is more useful if you're buying gift cards at other stores or using the card outside of Target.
Buying gift cards online versus in-store
The rewards rate does not change based on where you buy the gift card. Whether you purchase a Target gift card at a physical store, on Target.com, or by calling Target's customer service line, you earn the same 5% back with a RedCard or 1% with a Mastercard.
Digital gift cards (also called e-gift cards) work the same way as physical ones for rewards purposes. You can send them when ready to someone's email, and the rewards post to your account just as they would for an in-store purchase.
One practical difference: if you buy a gift card online and it arrives as a code in your email, make sure you or the recipient does not lose that code. Unlike a physical card, there's no backup if the email gets deleted. Target's customer service can help recover a lost code if you have the order confirmation, but it's easier to keep the email safe.
Gift cards and credit limits
A gift card purchase counts against your credit limit just like any other purchase. If you have a $500 limit on your Target RedCard and you buy a $300 gift card, your available credit drops to $200 until you pay the bill.
This matters if you're planning to buy multiple gift cards or large denominations. Some people buy gift cards as a way to "spend down" a high credit card balance before paying it off, which can help your credit score by lowering your credit utilization ratio. However, this only works if you actually pay off the gift card purchase — carrying a balance costs you interest and hurts your score.
Gift card purchases do not trigger cash advance fees or special handling. They're treated as regular retail transactions from a credit reporting standpoint.
Restrictions and things to watch for
Target does not limit how many gift cards you can buy or how much you can spend on them. You can buy one $500 gift card or fifty $10 gift cards in a single transaction, and the rewards will explore the same way.
However, if you're buying gift cards as a way to move money between accounts or to avoid spending limits, your card issuer may flag the activity. Credit card companies monitor for unusual patterns, and buying large amounts of gift cards in a short time can trigger a fraud review. This is not a restriction on gift cards themselves — it's a security measure. If it happens, you'll usually get a call asking you to confirm the purchase.
One thing to note: if you buy a gift card and then return it, the refund goes back to your credit card as a credit, not as cash. You cannot return a gift card for money.
When buying gift cards with a credit card makes sense
Buying Target gift cards with your RedCard makes financial sense if you're going to spend the money at Target anyway. The 5% back is essentially a discount, and it applies whether you're buying the gift card for someone else or for yourself to use later.
It makes less sense if you're paying interest on your credit card balance. If your RedCard has a 20% interest rate and you're carrying a balance, the 5% reward is wiped out by the interest you're paying. In that case, it's better to pay off the card first and then buy the gift card.
Buying non-Target gift cards with your RedCard (earning 1% back) is less compelling, since you could often earn more rewards by using a different card. For example, if you're buying restaurant gift cards, a card that earns 2% or 3% at restaurants would be better.
Frequently Asked Questions
Do I earn rewards on gift card purchases if I use a Target debit card instead of a credit card?
No. The Target RedCard debit card does not earn rewards on any purchases. Only the Target RedCard credit card and the Target Mastercard credit card earn rewards. If you want the 5% back on gift cards, you need to use the credit card version.
Can I buy a gift card to another store using my Target credit card and earn rewards?
Yes, but at a lower rate. With the RedCard, you earn 1% back on non-Target gift cards. With the Mastercard, you typically earn 1% back as well. You might earn more rewards by using a different credit card that specializes in that category — for example, a card that earns 3% at restaurants would beat the 1% you'd get from a Target card on a restaurant gift card.
What happens if I buy a gift card and never use it?
You keep the rewards you earned from the purchase. If you bought a $100 Target gift card with your RedCard and earned $5 back, that $5 is yours even if the gift card sits unused. The unused gift card itself does not expire — Target gift cards have no expiration date.
Can I use a Target gift card to pay off my Target credit card bill?
No. A gift card is a prepaid card that can only be used to buy things at Target. It cannot be used to make a payment on your credit card account. You have to pay your credit card bill with cash, a check, or a bank transfer.
Do I earn rewards on a gift card purchase if I use a coupon or discount code?
Yes. The rewards are calculated on the final price you pay after the coupon or discount is applied. So if you use a 10% off coupon to buy a $100 Target gift card, you pay $90, and your 5% RedCard reward is calculated on that $90.