Canadian Credit Card Gift Card Hack Explained: Pros, Cons & When to Use It!

1. Returning to Vancouver: A Personal Reflection
2. Understanding the Gift Card Hack
3. Pros and Cons of the Gift Card Hack
4. The Importance of Purchase Protection
5. Refund Challenges with Gift Cards
6. When to Use the Gift Card Hack
7. Recommended Credit Cards for the Gift Card Hack
8. FAQ

Returning to Vancouver: A Personal Reflection

After spending some time in Taiwan, I am back home in Vancouver, Canada. While I enjoyed my time abroad, there are certain aspects of life in Vancouver that I appreciate, such as the unique weather and the absence of tipping for takeout. Despite the challenges, the growing population indicates that many people love living here, making Canada an appealing place to start a career.

Understanding the Gift Card Hack

The gift card hack is a financial strategy that allows individuals to maximize credit card rewards. The concept is straightforward: use a credit card that offers high rewards for grocery purchases to buy gift cards. For instance, if you purchase a $2,000 Best Buy gift card at a grocery store using a credit card that provides 10% rewards, you could earn $200 in rewards when you later buy a TV from Best Buy. This approach can significantly increase your rewards compared to using a standard credit card.

Pros and Cons of the Gift Card Hack

While the gift card hack can be beneficial, it is essential to consider its limitations. Credit card companies are aware of this strategy and often impose limits on high rewards for grocery purchases. For example, a popular card may only offer high rewards on the first $2,500 spent monthly on groceries. Additionally, using gift cards can result in the loss of benefits such as purchase protection and extended warranties, which are typically offered when using a credit card directly.

The Importance of Purchase Protection

When making significant purchases, such as electronics or travel tickets, using a credit card can provide valuable protections. Many credit cards offer extended warranties and travel insurance, which can save you money in the long run. If you opt for the gift card hack, you may forfeit these benefits, making it crucial to evaluate whether the potential savings are worth the loss of protection.

Refund Challenges with Gift Cards

Another drawback of the gift card hack is the potential difficulty in obtaining refunds. If you purchase an item with a gift card and later decide to return it, the refund will typically be credited back to the gift card, limiting your options for future purchases. This can be particularly frustrating if you find yourself with a significant balance on a gift card for a store that does not carry the items you want.

When to Use the Gift Card Hack

Despite its disadvantages, the gift card hack can still be advantageous in certain situations. For example, using it for gas purchases or subscription services can yield significant rewards without the need for insurance or extended warranties. Before utilizing this strategy, consider the importance of insurance for the items you intend to purchase.

Recommended Credit Cards for the Gift Card Hack

If you decide to implement the gift card hack, several credit cards can help you maximize your rewards. The Cobalt card is a top choice due to its high grocery rewards, despite its spending limit. Other options include the RBC I Plus Visa and the RBC Avion Visa Infinite. Additionally, the Scotiabank Gold American Express card offers competitive rewards for grocery purchases, making it a worthy mention.

FAQ

Q: What are the benefits of living in Vancouver after spending time abroad?
A: Living in Vancouver offers unique weather and the absence of tipping for takeout, which many appreciate. Despite challenges, the growing population indicates that many people love living here.
Q: What is the gift card hack?
A: The gift card hack is a financial strategy that maximizes credit card rewards by purchasing gift cards with a credit card that offers high rewards for grocery purchases.
Q: What are the limitations of the gift card hack?
A: Credit card companies may impose limits on high rewards for grocery purchases, and using gift cards can result in the loss of benefits like purchase protection and extended warranties.
Q: Why is purchase protection important?
A: Using a credit card for significant purchases can provide valuable protections such as extended warranties and travel insurance, which can save money in the long run.
Q: What challenges might arise when using gift cards?
A: Refunds for items purchased with gift cards typically go back to the gift card, which can limit future purchasing options and be frustrating if the store doesn't carry desired items.
Q: When is it advisable to use the gift card hack?
A: The gift card hack can be beneficial for gas purchases or subscription services where insurance or extended warranties are not as critical.
Q: What credit cards are recommended for the gift card hack?
A: Recommended credit cards include the Cobalt card for high grocery rewards, RBC I Plus Visa, RBC Avion Visa Infinite, and Scotiabank Gold American Express card.