" It modifies the verb. This is true of all three versions. You can argue that everything in a sentence tells something about the subject.
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Eddie88The present participle here "using the credit card" was used in the above sentence. What is it modifying? I think it is modifiyng 'the dress.' Or do you think it is modifying The implied person who wants to buy the dress?Modifying the dress? The dress is using the credit card? I don't think so.
Eddie88 The police caught her[by]using the credit card. I'd say here it modifies "her," unless you mean to say the police used the credit card to nab her. Then It would modify the verb, not the police. (Forgive me for writing an ambiguous sentence.)
This again is a
AvangiI have no problem calling a present participle a gerund when it functions as a noun.
BTW, in "He loves swimming," I think "swimming" is the direct object of the verb.