Buying discounted gift cards with credit card

AltruisticPie1544

I recently signed up for a Chase 0% purchase credit card which I have started using for stoozing and was wondering if I could buy a Sainsburys 2.5% discounted gift card via Lebara rewards do my usual grocery shop every week.

I was thinking this would essentially get me the benefits of both interest in my savings account from stoozing and instant cashback via the gift card.

Has anyone done this? Would there be any fees that make this endeavour pointless?

Placitasgirl

I’d be wary…. Gift card purchases are often treated as cash advances if the card issuer is able to identify the purchase as a gift card. If Chase identify the purchase as cash you’ll likely be charged a fee, so do check the T’s and C’s for your credit card as this would probably wipe out the benefit of the 2.5% discount.

Grumpy_chap

The way I have done this is to buy a low value (£10) gift card with the discount and wait to see if the CC applied fees when the statement arrived.

If no fees, then good to keep going.

flaneurs_lobster

These rates can change daily but you can buy Sainsburys gift cards using the everup app at 3.7% cashback discount.

Going to be down to how Chase CC treat these spends, if as a 'purchase' then no problem, if as a 'cash advance' then you'll be paying whatever fee Chase charge for such plus interest from day 1.

What's true for Lebara's offering will not necessarily be true for the same product from (say) everup or Quidco.

I'm not aware of any way of finding out in advance how such a purchase will be treated by a particular card provider (other than hoping someone here has already checked it out for you).

You could ask them but I'm betting they wouldn't know.

flaneurs_lobster

@Grumpy_chap makes a good point, you probably won't know if a card transaction has attracted a fee/interest until the next monthly statement is issued.

My online CC account showed a recent purchase instantly but not the fee (stupidly used the wrong card for a currency purchase).

AltruisticPie1544

I was previously using the Cheddar app to buy discounted Sainsburys gift cards at up to 4.0% (gold boost) but they only accept instant bank transfer for payment, that's why I was looking at Lebara because I know you can pay by card there.

I think I'm just going to have to try it out with a small amount first and then see if I get hit with any fees when the statement arrives.

flaneurs_lobster

Everup take cards for payment. Just asked pretty much the same question as OP on another thread as I'm swapping from Santander Edge to Lloyds Ultra as daily spender.

AltruisticPie1544

I've just made 2 small gift card purchases on the lebara rewards website

1. £10 with chase credit card - will check next statement to see if any fees added
2. £5 with trading 212 debit card - I can already see this transaction has earnt me £0.07 cashback and has the merchant category listed as "business services". As far as I know trading 212 exclude certain cash like transactions from cashback (link), so this is looking promising so far.

When I googled the merchant category I got this AI summary:

The primary Merchant Category Code (MCC) for "Business Services" is 7399, which is defined as "Business Services Not Elsewhere Classified" (NEC). This code is used by payment processors for miscellaneous B2B services, including consulting, stenography, and security services. It is part of the 7300–7999 range covering business and professional services.

Placitasgirl

I wouldn’t have thought you’d have an issue buying gift cards with any debit card, or that there would be any charges as it effectively will earmark the funds from those available in your current account, so there is no “credit” involved whatsoever.

AltruisticPie1544

https://forums.moneysavingexpert.com/discussion/comment/81944458#Comment_81944458

Yes I'm aware of this. I only made the debit card purchase because I remembered that Trading 212 shows the merchant category in the transaction details and I wanted to know what it was.

MCC (Merchant Category Code) is set by the merchant and used by the card providers to determine what the payment is for i.e. cash like or otherwise.

HonestJohn

I buy my Sainsbury's gift cards via Lifestyle Giftcards on Topcashback. I get 5.25% discount that way. Might be less if you are not a Plus member. Only downsides are the 24 hour wait on Lifestyle and waiting for it to track.