By Matt
Credit card gift cards have become an increasingly popular gift idea in recent years. The cards are easy to use, allow freedom of choice, and are widely available. Like store gift cards or gift certificates, credit card gift cards give the illusion that the gift-giver has put some thought into the process. Perhaps the giver believes that a card is more personal than a check or cash. Regardless of the reason for the choice, it is important to be aware that the face value of the card may not be the amount that is available for use by the recipient.
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Benefits of credit card gift cards
- Widespread acceptance. Credit card gift cards are generally accepted anywhere the credit card company whose logo appears on the card is accepted. It may be hard to keep up with your friends’ or family members’ ever-changing tastes. A card is an easy way to let the recipient decide where to spend their gift, while maintaining the appearance that some thought went into the purchase.
- Ease of use. Like a regular credit card, all it takes is a swipe and your transaction is complete. Once the balance is used up, the card can be destroyed. Most cards can also be used to make online purchases, increasing purchasing options.
- Can be purchased at a discount. If you are using your own rewards to make the purchase, a discount may be available through your reward program. For example, a $25 gift card may only set you back $20, or the equivalent amount of points.
Avoiding fees
The drawback to giving a credit card gift card is that they are often subject to fees that can eat away at the value of the card. Here are a few tips to minimize their impact:
- Buy the cards in-store. This will avoid potential shipping fees, which can be as high as $15 or more for priority handling. A wide variety of cards are widely available at supermarkets and gas stations.
- Read the fine print. Dormancy or maintenance fees are often charged when cards go unused for a certain period of time. Find out how much they are, or if they exist at all. These small charges can slowly eat away at the card balance.
- Steer clear of cards with high transaction charges. A $3.95 fee per transaction quickly devalues a $50 gift. If you know where the recipient likes to shop, consider a store specific card. These cards usually offer unlimited, free transactions.
Be sure that a credit card gift card is the best option for the individual on your list. Consider why the card option makes more sense than cash, if it doesn’t, then keep it simple. If a gift card seems like the best option in the situation, then make sure you are offering a card than can provide at or near face-value.
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