Gift Credit Cards

If you're low on good gift ideas but find the idea of stuffing a couple of greasy, dog-eared dollar bills into an envelope tacky, you're a prime candidate for gift credit cards. There are many different kinds of cards, ranging from good-as-cash, use-anywhere deals to highly restrictive, one-store-only cards that even slap your recipient with usage fees. Learn to know what to look for here.

How Do Gift Credit Cards Work?

A gift credit card is very similar in nature to the regular, personal credit card you get bills for each month. The main difference is that there's a set balance; once the card is empty, it's empty. This finite nature, coupled with the lack of personalization, makes some businesses a little wary of getting left holding the bag if some slick person manages to rack up more than he should and then simply ditches the card. Gas station card-readers rarely ever accept gift credit cards, for example.

The safety feature of regular credit cards usually carry over to the gift card versions of the same, meaning you call and report it lost or stolen if this happens (card re-issue fees may apply). It also means you should protect the card and sign it immediately upon receipt, as failure to take these usual safeguards may limit the issuing card company's responsibility.

Gift Credit Cards vs. Store Gift Cards

In general, a card issued by a credit card company, bank or similar (affixed with a credit card seal like American Express or Mastercard to indicate its status) should work just like a regularly-issued credit card. A Visa gift credit card is accepted wherever there's a Visa sticker in the window, and some cards even work for cash withdrawals if needed. Some cards come with usage fees, however; monthly maintenance fees, balance inquiry feeds and ATM fees (for withdrawals) and others all chip away at the balance.

Store-specific cards are obviously more limited, although they work just as well, if not better, as a regular gift credit card in those particular stores or chains. Most lack the aforementioned fees altogether, and some states ban the practice of levying such fees across the board.

International Cards

Common credit card seals like the aforementioned Visa, MC and AmEx symbols open doors around the world, but that doesn't always apply to gift cards. This generally goes for Internet merchants and the like in other countries too. That's unfortunate, since a gift that fits in a regular envelope makes for an attractive option for those with friends and family abroad, especially in today's world of skyrocketing shipping costs.

In this situation, it may make sense to spring for a reloadable, international card like CardREX for Visa or Mastercard. These cost a bit more to set up and come with various usage fees, but if it's a commonly recurring gift situation, it can be significantly more convenient -- and cheaper -- than hauling boxes to the local UPS store.

Is It Right For You?

Of course, the issue of a gift card can be a delicate issue for social reasons. Many are overjoyed to get the equivalent of cold, hard cash to buy what they really want without having to wait through the usual half-mile, post-Christmas line at the exchange and returns counter. Others are more old-fashioned and may get downright offended that you didn't "take the time" to put more thought into them and their gifts. Ultimately, it's an issue between you and the recipient, so play it by ear and keep in mind the gift is for his or her benefit, not yours.

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