Consumer Reports: Examine gift cards carefully - WMC Action News 5 - Memphis, Tennessee

Consumer Reports: Examine gift cards carefully

(WMC-TV) – Gift cards are great. They're a sure thing and they're sure to sneak up and bite you if you don't know their terms and conditions.

Gift cards are the go to gift for many people, but if you don't use them right away they could end up worthless.

Consumer Reports' Money Advisor says it's important to think twice before giving a gift card.

"Gift cards are definitely better than they used to be," said Mandy Walker, of Consumer Reports Money Advisor. "New regulations have eliminated some fees, so you can't be charged if you don't use it within the first year and cards can't expire for five years."

But even with the new protections, there are still drawbacks.

"The new rules apply to merchant and bank-issued cards," Walker said. "So if you have a reloadable card or one that's not marketed as a gift card, you're going to want to pay close attention to those terms."

Bank-issued gift cards are convenient because you can use them almost anywhere, but they come with fees.

The Visa Gift Card from U.S. Bank costs $3.95 if you get it from a branch or $6.95 if you buy it online. And after 12 months, you're charged a $2.50 a month inactivity fee if you don't use it.

Even charity gift cards come with fees.

"We found one that charged a $4.95 transaction fee, and it charged another 3 percent to transfer the funds," said Walker.

If a gift card is still the way you want to go, retail store cards usually have little or no fees. You just want to make sure the person you are buying for likes to shop in the store.

"When you're giving a gift card, you want to include the terms and the policies, as well as the receipt, which might be needed if the card is lost or stolen," said Walker.

Better yet, just give cash or a check. No strings attached and no one objects to cash.

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