Think twice about giving holiday gift cards and prepaid bank cards

FOR IMMEDIATE RELEASE
(Free-Press-Release.com) December 1, 2008 -- Wallingford, CT – December 1, 2008 – Hard cash is on many wish lists this year as families try to find a balance between holiday spending and paying for essentials. A popular option this season is the pre-paid bank card, or as they are also known, “stored-value” cards.

The cards are similar to pre-paid gift cards but may be used anywhere credit cards are accepted, allowing shoppers more flexibility as to where the money can be spent. These cards, however, are not without a downside and Connecticut BBB is providing advice on the purchase and use of pre-paid bank cards.

One BBB recently researched one bank-issued card and discovered more than 27 different fees, ranging from under a dollar to $20. These fees may be attached to contacting customer service, loading more money onto the card (recharging), and inactivity. One card even had a weekly base fee of $1.95, which adds up to more than $100 a year to use the card.

Pre-paid cards are often branded by major credit card companies, and while they promise zero or limited liability if a credit card is lost or stolen, the same protections do not necessarily apply to stored-value cards, which should outline whatever protection is afforded to the holder.

Retail gift cards – Buyer beware!
In the midst of the recent closures and bankruptcies of several major retail chains, consumers are concerned about buying gift cards and what might happen if the store goes out of business before the card is used.


Many consumers, in an effort to avoid a “holiday credit card hangover” are increasingly turning to debit cards and cash purchases, and even giving cash or checks as presents rather than gift cards.

Connecticut BBB has some pointers when considering buying a gift card:

-Check out businesses at www.bbb.org to see whether any government actions or bankruptcy information is posted on a Reliability Report.

-Ask if the gift card has an expiration date or may be redeemed online and whether there are any location limitations using the card.

Finally, if you receive a gift card, use it as soon as possible. You never know how long its issuer will be in business.

For more information on giving and using gift cards, and managing credit and debit cards this holiday season, go to www.bbb.org.

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