The Expensive Truth About Gift Cards
Life + Money

The Expensive Truth About Gift Cards


Gift cards are on the top of many consumers’ holiday shopping lists, but with many such cards carrying high fees or ultimately going unused, they may not bring as much cheer as gift givers think.

When it comes to fees, the worst offenders are general-purpose cards, such as those with an American Express, Discover, MasterCard or Visa logo. New research by found that all seven general-purpose cards studied levied purchase fees of up to $6.95, and five of the seven charge recipients fees for maintenance or when the cards go unused. In comparison, just three of 55 store-specific cards in the study, like those from or Wal-Mart, charge a purchase fee in all instances, while another three charged fees in certain circumstances.

“While most Americans prefer to receive general-purpose gift cards because they can be used almost anywhere, they should be beware of the fees these cards charge both purchasers and recipients,” Bankrate credit card analyst Janna Herron said in a statement.


Another big down side to gift cards: Many of them never get redeemed. An estimated $2 billion worth of gift cards went unused last year.

Gift givers aren’t the only ones enamored with the ease of gift cards. Gift cards topped consumers’ holiday wish lists for the seventh year in a row, according to a recent study by the National Retail Federation.

Those who receive gift cards to stores they don’t frequent aren’t entirely without options. Several startups such as Plastic Jungle and Cardpool allow consumers to trade in unwanted cards for a portion of the card’s value in cash.

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