What are Prepaid Visa and Mastercard Gift Certificates? Prepaid cards and gift cards sound alike, since you can stash funds on each of them. Nevertheless they actually have some key differences. To begin with, prepaid cards are winning the popularity contest. The cards, which are reloadable, are adding more www prepaidgiftbalance com, although you may pay dearly for the privilege. Meanwhile, gift certificates, which are often for more limited one-time uses but have few fees, are losing favor, Mercator Advisory Group says.
“Gift cards have limited functionality and they are very straightforward,” says Aleia Van Dyke, an investigation consultant at Javelin Strategy and Research. “But prepaid cards are more complicated and multifunctional.” She expects gift cards to eventually fall through the wayside as prepaid cards grow in popularity, together with their uses. For the time being, the two cards get some overlap simply because they can both be employed to control spending. “They can be quite a bank checking account alternative,” Van Dyke says.
Here are some key differences to find out when shopping for either card. Prepaid Gift Card Flexibility. Gift cards are usually limited to purchases at a retailer, says Greg McBride, CFA, chief financial analyst at Bankrate.com. Typically, big retailers – and even smaller ones in departmental stores – provide the cards for purchases at those locations. The cards are excellent deals for your buyer or perhaps the recipient, says McBride. The reason: A $100 gift card results in $100 of buying power.
“So you have a whole lot more flexibility inside your spending,” adds Harrine Freeman, a monetary counselor at Maryland-based H.E. Freeman Enterprises. But they will probably carry fees, in accordance with CreditCards.com, which can be belonging to Bankrate.
You can even easily buy, sell or trade gift certificates online, Freeman says. And after the Charge Card Act was passed during 2009, gift card expirations were extended to five-years right after the activation date. On the downside, gift cards can be overly simple. They generally don’t include account management tools and can be used only once, Van Dyke says.
Conversely, McBride says, prepaid cards can be used a variety of transactions like making withdrawals from ATMs. To enable them to sometimes be utilized as banking account substitutes, which is the reason their popularity is quickly rising. Prepaid cards also can be loaded online or at retail locations.
Increasingly more banks, such as PNC, U.S. Bank and JPMorgan Chase & Co., offer their own prepaid cards, based on the Consumers Union. The cards are usually easy to get because you don’t need to have a bank account or even a credit rating.
People counting their pennies are able to use prepaid cards as budgeting tools by loading vacation funds onto them, McBride says. Some prepaid cards offer free online bill pay, which can save consumers money, in accordance with Consumers Union. In order to collect points for shopping, some prepaid cards even offer rewards programs. “But I’ve never seen a present card which offers rewards,” Van Dyke says.
Prepaid Cards Fees. For that budget-minded, gift cards will often have only low or no fees. However, prepaid card fees vary widely and will quickly ding you. “Some prepaid cards work like good debit cards, because they have low fees or waived fees,” Javelin’s Van Dyke says. “However, in the event you choose the wrong card, you could end up having a lot of fees.”
McBride says by far the most prevalent prepaid fees are activation fees, ATM access fees and monthly service fees. Based on Bankrate’s 2014 Prepaid Card Survey, 83 percent in the cards surveyed charged monthly maintenance fees. And 53 percent have activation fees, starting from $2.95 to $9.95. Unlike gift certificates, prepaid gift balance balance that sit unused in a drawer uryelx start logging fees. “So, you need to evaluate how you’ll be using the card,” McBride says.
Gift certificates that are lost or stolen may mean the consumer loses out. “A thief has access to each of the money on the card,” says Freeman. However, if you’ve registered the card, you might get some of your money back, however, you can also be charged a fee, she says. One caveat: Gift certificates issued with Visa or MasterCard logos are protected by credit card laws. And state laws governing gift certificates may also add a layer of protection, including requiring more disclosures or the legal right to redeem a card for money, in accordance with the Consumers Union.
Prepaid cards may offer more consumer protections than gift certificates, but rules vary. Many times, fraud protections are merely “vaguely defined,” based on the Consumers Union report. And prepaid card protections may be voluntarily withdrawn at any time.