The lowdown on gift cards
Before you give that hard-to-shop-for someone a gift card, be sure
to take a close look at the fees that come with it.
There's nothing remotely festive about monthly maintenance charges
and other fees your gift card recipient may be tagged with. And
the hefty shipping, handling and service fees charged to the gift-card
giver can take a big chunk out of any budget. As appealing and convenient
as gift cards may be, you'd better take a good look at the boring
old fine print that comes with it.
And while several states have passed new gift card laws aimed
at bolstering consumer protections, being a smart and savvy card
shopper is still the best protection of all.
Here are 10 important questions every gift card giver and recipient
1. Where can I use my gift
The answer depends on the type of gift card that
is purchased. There are two kinds of gift cards: store-specific
gift cards and general-purpose gift cards.
You can use a store-specific gift card to buy merchandise from
a particular store or through a store's Web site. Not all gift cards
can be used for online shopping, so be sure to ask. A general-purpose
gift card from Visa, MasterCard or American Express may be used
almost anywhere those cards are accepted. Important exceptions,
including airline tickets, may apply. Be sure to check with your
gift-card program for details. The key advantage of general-purpose
gift cards is the flexibility you have in using the cards. The downside?
Fees, fees and more fees. Many general-purpose gift cards come loaded
with fees. It's important to shop carefully.
If you know a person's tastes, a store-specific gift card may
be the way to go. Store gift cards are less likely to charge hefty
2. When does the gift card
Is your gift card good for six months? A year?
Even longer? Be sure to check.
With some gift cards, once you pass the card's expiration date,
you're done. It doesn't matter how much value is still on the card,
you won't be able to use it.
Other gift-card programs will send you a replacement card with
your remaining balance on it. But you pay for this privilege. Fees
on replacement cards range from $5.95 to $10. Your best bet is to
use your gift card before it expires.
States such as California, Washington and New Hampshire have passed
laws eliminating gift card expiration dates. For details on gift-card
laws in your state, contact the attorney
general's office in your state.
3. Are there shipping and
Ordering a gift card online is convenient, but
you could be zapped with a fee for shipping and handling. A prepaid
Visa gift card from National City charges a $4.95 to $8.95 fee for
shipping and handling. Want that gift card delivered on the double?
You'll pay more. You can minimize or avoid these kinds of fees by
shopping early and purchasing gift cards directly from retailers.
You may be able to save yourself a few dollars per gift card by
ordering your cards online rather than over the phone. Be sure to
States such as California and Washington have passed laws eliminating
or restricting service fees. For details on gift card laws in your
state, contact the attorney
general's office in your state.
5. Is there a monthly maintenance fee?
Some gift cards will charge you a monthly maintenance
fee if you still have a balance on your card after six months or
a year. With the American Express Gift Card, a $2 monthly fee kicks
in after a year. With the Bank of America Visa Gift Card, a $2.50
monthly fee kicks in after just six months.