Pay Phone Cards
They Are Accepted Almost Everywhere But How Good Are Bank Issued Gift Cards?
You almost certainly have seen gift cards being offered at most of the major stores. They are usually sold near the check-out and in various denominations. A lot of people use them because they can be redeemed for anything that that location or chain offers. This has made them an easy gift solution for those on your list that are hard to buy for. That’s fine if you are familiar with what store that person likes or often goes to, but what if you don’t? The answer might be a bank issued gift card.
There are gift cards that are valid for just about any item and may be redeemed at almost any store but are backed by the banks. This sounds great but there are a few issues you need to be aware of before you buy this type of card.
Gift cards began to gain popularity with a lot of retailers since they would get money up front without having to give the product. You are basically offering them a free loan. From all of the gift cards that are bought a certain percentage will never be used and that amounts to free money for the retailer. Studies also show that when a shopper does use the card they will often spend more than what the card is valued at which is good for a company’s profits. All of this has aided to give rise to an industry that doesn’t simply make the plastic cards but also adornments like gift card holders and a huge variety of clever gift card packaging to give it the feeling of a more complete present.
It’s no wonder that banks decided to get some of the action. While these cards appear and act like ordinary gift cards there are a few key differences. Unlike a retail card, bank issued cards often have an additional purchase fee tacked on. So if you wish to purchase a $50 gift card it may cost you $55.
Expiry dates usually affect a bank backed gift card. This is unlike store gift cards where in certain parts of the country they are not permitted to expire. However even if you use the card before it expires you could be hit with additional fees. It is not uncommon to have a monthly maintenance fee that is charged after your card is activated. This charge is not generally activated from day one but can come into play a a number of months in the future. Other fees may include charges for the reissuing of a lost or stolen card and charges for live phone inquiries.
With regular cards if a store or retail location files for chapter eleven, however, a gift card for that store may no longer be of any value. Unfortunately these bank backed cards are not immune to this scenario. Despite the fact that a card is backed by a major credit card company, if the issuing bank goes belly-up the card could no longer be worth anything.
Despite all of the negatives a bank authorized gift card are still be the best and most flexible way to give someone a present. Just like any purchase it is always advisable to do your homework and understand what your are buying.
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