Gifting A Pre-Paid Credit Card: You Might Be Paying More Than You Realize

Buying a gift is not always the easiest task, especially when you’ve got a really busy schedule and you don’t know the recipient all that well. Parents, you know this feeling when you find yourself tasked with buying something for kids you don’t know when your babies are doing the birthday party rounds. Sometimes, gift cards are the best bet. Most of the time, we give gift cards so the recipient can pick out something he or she likes and have it paid for. Sometimes, though, we can’t narrow it down to just one store and opt for the pre-paid credit card instead. Who doesn’t want to get the equivalent of a gift card they can basically spend anywhere? It’s the perfect solution when you have no idea what to get for someone.

Or is it?

You’re going to notice right away, at the point of purchase, that the pre-paid credit card is not what it seems. You’ll be charged an activation fee, bringing the total of what you pay for it up well beyond the value.

Unfortunately, that’s not the end of it. Some cards will eventually require an annual or monthly maintenance fee, which is taken off the balance remaining on the card. If the gift recipient doesn’t use the card you’ve given them right away, the funds on it will slowly deplete. What’s worse, is that if they lose the card, there are hefty fees associated with replacing it to access the funds still on the card. If you have a $25 gift card, and you lose your card, you could be down to $15 on the card after replacing it. Add to that a monthly fee, and your balance will be gone in no time.

And sometimes, the cards themselves expire. While your balance will still be there, in order to access it, you would have to purchase a replacement card. That’s another $10 just to get access to your gifted money.

On cards pre-paid with smaller amounts, it is possible to run the card dry just paying fees and never having spent a cent on yourself.

So, if you’re looking to buy someone a gift card for their birthday or some other special occasion, consider buying a gift card from a specific store or service they love. If you have no idea which store or service that is, nothing beats the old slip-a-twenty-in-the-birthday-card routine. There are no activations fees on a twenty dollar bill, no monthly maintenance fees, and you don’t need to worry about it expiring.

Have you ever bought a pre-paid credit card as a gift? Let us know how that went in the comments!