Tuesday, May 25, 2010

What You Need to Know About Gift Cards

The CARD Act of 2009 has regulations that affect gifts cards. Starting on August 22, 2010 the CARD Act will require that gift cards have a five year expiration date that must be disclosed to the consumer in advance. These regulations do not apply to prepaid telephone cards and reloadable gift cards.

Gift cards and gift certificates that have not been used can't incur inactivity fees for at least 12 months, and the amount and terms of the fee must be disclosed to the consumer in advance. After a year, only one fee can apply each month. Previously multiple fees were applied each month.

In September 2009, American Express ended its monthly gift card inactivity fee that states that after a year a card that had a balance was charged $2 deduction every month until the balance was zero.

Unfortunately gift cards can still charge upfront fees such as a fee for activity the card which can range from $4.99 - $9.99.

Consumers unfortunately may have to pay higher fees upfront after August 22, 2010 to make up for the revenue companies will lose by not being able to charge inactivity and other fees after the card is purchases.

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