Ever receive a gift card, forget that you even have it, and then once you attempt to use it, it turns out the gift card expired? So frustrating, right? Worry no more! Those new credit card laws (Credit CARD Act of 2009), that I constantly talk about on HelpSaveMyDollars.com, not only reform the credit card industry for the better, but also gift cards. Here’s what you need to know about gift cards this holiday season, especially since gift card sales are expected to reach $25 billion, according to the National Retail Federation (NRF).
For retail gift cards (like a gift card from Macy’s or Best Buy)…
1. No More Inactivity Fees: An inactivity fee is a fee charged because you haven’t used the card. Unless the gift card has not been used for more than 12 months, inactivity fees will not apply. After 12 months of no use, you could be charged as much as $2.50 per month as an inactivity fee.
2. Expiration: Thanks to the Credit CARD Act, gift cards cannot expire until 5 years has passed since the card was opened.
3. Disclosure: Beginning on January 31, 2011, the expiration date and any fees associated with the card must be printed on the back of the card. (Why is this important provision being implemented next year? If retailers had to print disclosures on the backs of gift cards earlier, or in time for the current holiday shopping season, 100 million cards would have been destroyed).
For bank issued gift cards that can be used at virtually all stores (but they usually have a high purchase price)…
The same rules about expiration dates and inactivity fees apply to bank issued gift cards, but banks can still charge a one time activation fee and a fee to reinstate the card it if is lost or stolen.
Gift Cards Are Popular:
According to the National Retail Federation, 23.8% of consumers plan to buy those bank issued gift cards from providers like American Express and Visa and 77% of shoppers plan to purchase one gift card, at the very least.