Prepaid gift cards are everywhere. Since Congress passed a law limiting bank rates under the CARD Act, banks have been looking for ways to earn extra money to offset a short-term rate cut. Because rechargeable prepaid cards are less regulated, they have become a new source of income for financial institutions. This is what you should consider before buying:
- How much does it cost?
Despite claims to the contrary, rechargeable cards still have charges. When buying a card, an activation fee is charged, which ranges from $ 4.95 to $ 9.95. Some charge up to $ 14.95 in advance for activation. If you are buying a non-rechargeable card, it’s important to consider the rates before buying, as they are intended for single use only. If you plan to use the card for an extended period of time, it may be better to buy a rechargeable card, since you can add money to the card after the initial balance has been spent, without having to pay an additional activation fee.
- Expiration date
Congress passed a law that extends the life of closed-circuit gift cards to 5 years from the date of purchase. Closed-circuit gift cards are cards specific to the seller. For example, if you buy a Macy’s card, you can only use it in your store. However, the law does not apply to open-loop gift cards issued by vanilla prepaid card, which can be used wherever cards are issued. When purchasing a version with an open loop, consider the expiration date and be sure to use the card before its expiration date, otherwise you will lose the balance on the card.
- Another thing to consider when buying a prepaid card is if the card is for one-time use only or you can reload it. A non-rechargeable card means that after the initial vanilla prepaid card balance of the card has been used up, you cannot add more money to the card, so if you are looking for a card that can be used for a long time, this is not your option.
The last thing to consider is the functionality of your prepaid card. Some prepaid cards cannot be used to make purchases on the Internet or cannot be used on eBay or Pay Pal, so be sure to check them before buying.