Two types of prepaid payment cards can potentially be used to pay bills: prepaid debit cards and network-branded gift cards (like those that carry the Visa or Mastercard logo). Prepaid debit cards come in a few different forms and offer the opportunity for a convenient money storage account that can take the place of complex checking.
Gift cards that carry the Visa or Mastercard logo are typically sold in different denominations and can be used for online shopping or bill payment if sufficient balances are available.
Before diving into bill payments, it can be good to understand the two types of prepaid payment card options a little better. Prepaid debit cards can work like network-branded gift cards and any electronic payment card that is loaded with funds considered deposit assets rather than credit liabilities. Prepaid debit is a popular money storage solution that can take the place of traditional bank checking.
Receiving gift cards as presents provides you with extra spending money for purchases at specific stores or restaurants But what if you’d rather put those balances towards paying down your credit card bill instead? Can you use gift cards to pay your credit card?
Unfortunately, there is no direct way to pay a credit card bill using a gift card. When making payments through your card issuer’s website or automated phone system, there’s no option to input gift card numbers. The payment methods accepted are typically limited to linked bank accounts, debit cards, other credit cards, or checks.
However, with a few extra steps you can effectively transfer gift card money to your bank account enabling you to then pay your credit card. It involves exchanging the gift cards for cash you can deposit. Below are some of the most common techniques people use for turning gift card balances into funds usable for credit card payments.
Add Gift Cards to PayPal
The simplest method is adding your gift card to a PayPal account. Many popular retail and restaurant gift cards can be redeemed through PayPal’s website. They provide an option to enter card numbers and PINs to add the balances to your PayPal funds.
Once the money is in your PayPal, you can then transfer it to your connected bank account. From there, you can use those bank account funds to make payments on your credit card through the issuer’s website or over the phone. This allows gift cards to indirectly pay down your credit card balance.
Just keep in mind that you typically won’t get the full gift card value added to PayPal. They take a percentage as a processing fee. Also, always verify the specific merchant gift card is eligible for PayPal redemption before purchasing it to use this method.
Use a Gift Card Exchange Service
Another option is utilizing a gift card exchange service either online or at a kiosk. Websites like CardCash allow you to enter your gift card details and will provide a cash offer for the balance. They either send a check or deposit the money into your PayPal.
Retailers like grocery stores commonly have gift card exchange kiosks inside the entrance. You insert the card, and it provides payment options like cash or store credit. With the cash in hand, you can then deposit it into your bank and use it to pay off your credit card.
Similar to PayPal, these exchange services take a cut, so you won’t get the full face value. Also, always check they support the specific merchant card you have before exchanging.
Buy a Money Order with a Gift Card
Certain retailers that sell money orders will allow you to purchase them using a gift card. Places like the post office, Walmart or Western Union have this capability. Call ahead to verify your location supports it.
To do this, buy the money order using the gift card, keeping the value under the amount on your credit card bill. Then take the money order to your bank to deposit the funds into your account. Finally, make the online credit card payment from your bank account.
Since money orders are prepaid, they guarantee the money for deposit like a check would. This provides a way to transfer gift card funds through your bank to pay off your credit card.
Trade Gift Cards with Friends or Local Businesses
If the gift card you have isn’t supported by the other redemption methods, consider trading it with a friend or local business. For example, you may be able to exchange your restaurant gift card for a retail card accepted more widely.
Facebook groups for buying/selling/trading gift cards provide an easy way to find people interested in a swap. You can also ask favorite restaurants and shops if they’d trade your card for one of theirs. Once you trade for a more versatile gift card, you can then utilize one of the other payment techniques.
Redeem Gift Cards for Statement Credit
Some credit card companies allow redeeming gift cards from supported merchants for statement credits. You enter the details through your online account, and the balance gets applied to your current balance.
However, there are often restrictions, like only being able to redeem for certain retailers in set increments. Check your cardholder agreement and account portal to see if this redemption option exists and how it works for your specific credit card.
Buy Cryptocurrency as a Form of Cash Out
Certain gift card resale sites also give the option of exchanging your balance for cryptocurrency like Bitcoin instead of cash. You can then sell the cryptocurrency and withdraw the funds to your connected bank account.
This acts as another way to cash out gift cards, though it involves extra steps of first buying and then selling the cryptocurrency. The value may also fluctuate slightly between these transactions. But overall, it still lets you get cash from gift cards usable for credit card payments.
Liquidate Gift Cards through CardPool
CardPool offers both online and in-person gift card exchange for cash or direct deposit. Their website allows you to enter gift cards from many top brands to liquidate the balances. You can also mail gift cards to them and receive payments via check or direct deposit.
For in-person exchanges, they have self-service Gift Card Exchange Kiosks located inside grocers like Safeway and selected convenience stores. Their kiosks turn gift cards into eGift cards usable anywhere, cash, or money orders. Getting cash immediately provides a quick way to then deposit the money and pay your credit card.
Don’t Forget About Gift Card Fees
When exploring these options, remember that most methods to convert gift cards to cash will entail fees. Third-party gift card exchanges typically take anywhere from 1-15% off the balance as their cut.
Even adding to PayPal incurs a small service charge. So your usable cash will be slightly less than the face value of the gift cards. Factor these fees into determining the right redemption method for your needs and situation.
Can You Do a Direct Gift Card Balance Transfer?
Given the extra steps required to move gift card money to bank accounts for credit card payments, you may wonder:
Can you do a direct balance transfer from a gift card to pay a credit card?
Unfortunately, gift cards are prepaid and function more like cash. The balances live on the card itself rather than being attached to any bank account.
Credit card issuers only allow transferring balances between financial accounts like checking, savings, or other credit cards. There is no way for them to directly interact with the separate gift card system to pull funds from there.
Any form of gift card redemption requires going through an intermediary first to exchange the balance for traditional funds usable for credit card payments.
Turning Unwanted Gift Cards into Credit Card Payments
We’ve all received a gift card to a store we don’t like or restaurant we never visit. Or maybe a gift card has been sitting in your wallet so long, you don’t remember where it’s even for anymore!
Rather than letting those balances go to waste, use one of the cash-out methods above to put the money towards your credit card instead. This takes some extra effort, but does provide a way to offload unwanted gift cards.
Just be sure to check any fees and confirm the card is redeemable before purchasing gift cards specifically to exchange. Pay close attention to brands, values, and redemption restrictions. With a little planning, you can transform an unused gift card into credit card payments.
Next time you’re holding a gift card you know you won’t use, don’t let it go to waste. Funnel that spending money towards higher priorities like knocking down balances and saving on credit card interest. A few extra steps unlock an opportunity to optimize gift funds and make a dent in your debt.
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.
What Can You Not Do With a Prepaid Card?
With a prepaid card, you cannot borrow money. (It does not function like a credit card.) You only have access to the funds loaded on the card, which can be reloaded, but you cannot utilize more money than you have. As such, prepaid cards do not build credit.
Convert a Visa Gift Card into Cash INSTANTLY
FAQ
How do I transfer money from a gift card to my bank account?
Yes, you can move money from certain gift cards directly into your bank account, if allowed. Due to the terms of the gift card, you may need to move the money from the gift card to a third-party service like PayPal or Venmo. These services connect to your bank account and let you transfer money from there.
Why can’t I pay bills with a gift card?
Most of the time, the card processor decides if a company will accept an electronic payment card for a bill payment. Store gift cards typically can’t 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.
Can I transfer a Visa gift card to my bank account?
Check the issuer’s rules before trying to transfer money from a VISA gift card that can’t be put into a bank account. If a direct transfer is not possible, use PayPal or Venmo to move the money from your VISA gift card to your bank account.
Can I pay my Capital One bill with a gift card?
To pay your Capital One credit card with a debit card for the first time, you can only do so at certain stores and third-party payment processors, such as 7-Eleven stores. Kroger stores. MoneyGram.
Can you pay off a credit card with a gift card?
It’s not often that a gift card can be used to pay a credit card bill. Check with your credit card company to see what kinds of payments they accept. You can get generic prepaid gift cards from payment networks like Visa. These cards can be used in a lot of different places. Nevertheless, it’s unlikely you’ll be able to use gift cards to pay off a credit card directly.
Can you use a gift card to pay bills?
Some types of bills can be paid with a gift card as long as it has enough money on it. Credit cards could not be used for this. This is because a generic or prepaid gift card can work like a debit card. The merchant determines the payment methods it will accept.
How do I make payments with my gift card?
After successfully linking the gift card to your credit card account, you can use the gift card to pay for things. Since you linked your gift card to your credit card account, you can now use the gift card to pay off your credit card balance. Here’s how you can make payments with your gift card:
Can you pay a bill with a prepaid gift card?
This is because a generic or prepaid gift card can work like a debit card. The merchant determines the payment methods it will accept. So, the only way to know for sure if a prepaid card can be used to pay a bill is to try it or look at the company’s payment terms. What can you use a gift card for?.
Can you use a Visa gift card for credit card payments?
Because they are not linked to a bank account, Visa gift cards can’t be used to pay for things with credit cards. They also cannot be used to purchase cash or cash-equivalents such as money orders.
Can you transfer money from gift cards to debit cards?
You can indirectly transfer money from gift cards to debit cards. Gift cards can be used to pay for things with a credit card through debit cards. This is helpful if you pay by phone or online. Can I Transfer Money from Gift Cards to PayPal?.
