Check the Fine Print on Bank Gift Cards

The holiday season is the gift giving season. When it comes to gift cards the consumer should double check and read the fine print. More than 95 percent of us have given or received at least one gift card, which is up from 2007 when more than 60 percent of people surveyed said they planned to give a card that year. According to Consumer Reports, gift card sales were predicted to reach $87 billion this year, as they are the most desired gift among women.

It is the bank cards that tend to charge more fees than retailer cards. American Express dropped its fees in October, but had charged $2 a month on cards that were more than a year old. The branded cards do not eagerly share the expensive and fine print. An example is the iCard Visa gift card which imposes a $25 charge every six months after the card is six months old. While bank cards offer the card user the flexibility to purchase at a wider range of retailers, but the costs can devalue of the card if it's not used quickly. In a Consumer Reports survey, it was noted that more than a fourth of the people who receive gift cards for the holidays do not use them within a year.

Gift cards are the most beneficial to sellers, not gift recipients. The current "lost value" of those unused cards is estimated by the Tower Group to be $5 billion. Bank cards are not the best value for your money primarily because the fees are tacked on the initial purchase of the card. Banks make considerable money from fees on the cards. They penalize the purchaser due to the fact that the accounting for unused gift cards is high, and they pass it on to the consumers. Until restrictions of gift cards by the Federal Reserve disallow the expiration of cards for at least five years, disallow maintenance charges before the card is one year old, and require obvious notification of fees bank issued bank cards are not the best choice.

Gift cards are convenient as well as desired however; some of the cards come with features that are less than desirable. Early expiration dates or monthly fees can quickly devalue the cards. The Los Angeles Times has noted, “That's led to their reputation as the gift that keeps on taking.”