New Credit Card Reform Affects Gift Cards Too

The new changes coming to the credit card industry in 2010 will not only affect credit card rules for consumers but it will also change the way retailers issue gift cards and prepaid credit cards. There have been many issues in the past on the subject of gift cards and prepaid credit that expired after a short time without much warning or that lose money due to fees and penalties that are added to the card. The controversy picked up a lot this year because so many retailers when bust in the face of the economic recession, leaving consumers with gift cards worth nothing.

New measures that are being imposed on credit cards will also address key issues that have been a problem with prepaid credit cards and retail gift cards. Some of these measures include:

There is a new authority over credit, gift, and prepaid cards that includes the ability to determine how fees are assessed, when to cap monthly fees, and provide assistance with fraud protection. The Federal Reserve Board will be the authority.

A gift or prepaid credit card can not expire sooner than five years from the last date money was transferred onto the card.

There can be no fees assessed until the card has been inactive for 12 months. Only after that period of time can one monthly fee be assessed on the card.

Because of all of the complaints surrounding gift cards and prepaid credit cards lately, there are also some tips to help you prevent issues in the future. Keep these tips in mind when purchasing new cards.

Buy from places you are familiar with and trust. It may not be wise to purchase gift cards from online auction sites or other places where the card was obtained in a fraudulent manner.

Remember that gift and prepaid cards come with terms and conditions too. Be sure to read the fine print and approved of the terms before you buy.

Don’t assume the card does not expire just because there is no visible expiration date. Make sure you ask about all fees and expiration dates when you make the purchase so you are aware of the rules. Otherwise, you could end up losing money when the card becomes useless.

When you are purchasing a card in person, look at both sides of the card and be sure that the protective coatings and stickers have not been disturbed to reveal PIN numbers. If you do come across a card that has been tampered with, report it to the manager of the store or location.

When you are issued a gift card or prepaid credit card, make sure you keep the receipt with the card to prove you purchased the card in the event it becomes stolen, lost, or doesn’t work properly at check out.

Remember that a gift card or prepaid card is not much different than cash so you should take measures to protect it just as you would dollar bills. Once it is lost or stolen, it can be very difficult to replace at full value. Some places will not issue a replacement card at all while others will charge large fees to do so.

Gift cards and prepaid credit cards that feature a major credit card logo can be a great gift idea for any occasion because they are as useful as cash but do remember they have different regulations for use that plain cash does not. Don’t be afraid of gift cards and prepaid credit cards but be cautious when making the initial purchase and know what you are getting into with the different terms and conditions.

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This entry was posted on Thursday, July 30th, 2009 at 8:49 am and is filed under Choosing a Credit Card, Credit Card Advice, Credit Card Use. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.