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Gift Credit Cards

Althought gift credit cards can be useful and much-appreciated gifts, it is important to understand what they are and how they work, and to check the terms and conditions of yur particular gift credit card. Each issuer has different gift credit card fine print, and some of the clauses in the fine print can be costly.

Gift credit cards are actually not credit cards in the traditional sense of the word. A holder of a traditional credit card makes purchases on credit, and pays the bill later, when it falls due. A gift credit card is a stored value card, or debit card. A certain amount of money is deposited into the gift credit card by the purchaser at the time the gift credit card is issued, and only that amount of money may be spent using the gift credit card.

If you think about the old-fashioned paper gift certificate still issued by many major retailers, you will have a more accurate notion of the nature of gift credit cards than if you think about credit cards in general. Gift credit cards are not really credit cards at all - they are more like plastic gift certificates.

Some retailers have switched from using paper gift certificates to issuing gift credit cards. While these store-specific gift credit cards have the disadvantage of being limited to use in a particular store, this is offest by the benefit that generally charge lower fees than more general gift credit cards.

Gift credit cards are issued by major credit card providers, such as Visa, Mastercard, Discover, and American Express, both directly and through banks. Each gift credit card issuer has their own particular set of terms and conditions.

Some issuers limit gift credit cards to use within the USA. Others will not allow gift credit cards to be used for certain purchases, such as air tickets or hotels. American Express will not issue gift credit cards to the residents of five US states, because, according to American Express, “restrictive legislation” makes it prohibitively expensive to do so.

It is important to be aware of the problems with gift credit cards. If you have chosen the right gift credit card, you will be able to give a gift which is as flexible as cash, but as personalised as a gift certificate. If you have received a gift credit card, you have no choice about the issuer, so make sure you read the fine print, so you can avoid any unwanted fees or complications.

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