Store gift cards better than bank cards, credit cards - KMSP-TV

Store gift cards better than bank cards, credit cards

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MINNEAPOLIS (KMSP) -

Giving a gift card this year? If you know where they like to shop, you might want to go with a store-branded gift card over a general spending gift card from a bank or credit card company.

According to the Bankrate.com 2012 Gift Card Survey, store-branded gift cards have fewer purchase fees than those issued by banks and credit card companies.

Of the 55 store-branded gift cards surveyed, nine percent charged a purchase fee and two percent charge a maintenance fee. Conversely, all of the eight gift cards offered by banks and credit card companies (Discover, American Express, MasterCard, and Visa through various banks), charged a fee ranging anywhere from $2.95 to $6.95.

Federal law requires gift cards stay good for at least five years, and most gift cards aren't allowed to expire under Minnesota law. 95 percent of the cards surveyed by Bankrate do not have an expiration date.

2012 GIFT CARD SURVEY FINDINGS

Store-branded gift cards charge fewer fees than the all-purpose versions issued by banks and credit card companies.

Of the 55 widely-held store-branded gift cards surveyed, only five charge a purchase fee. Conversely, all eight widely-held gift cards offered by banks and credit card companies charge a purchase fee ranging from $2.95 to $6.95.

In fact, 75 percent of the gift cards offered by banks and credit card companies charge dormancy or maintenance fees (up to $3 per month) if the card is unused for 12 or more months. Only two percent of store-branded gift cards charge these fees.

Six retailers that offered reloadable gift cards last year discontinued those offerings, while three others began offering reloadable gift cards this year. At present, 51 percent of the gift cards surveyed can be reloaded.

Whereas electronic gift card (e-card) availability rose sharply from 2010 to 2011, the trend over the past year was essentially flat.

Two-thirds of gift card issuers will replace the card and/or funds in the event of loss or theft.

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