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Bank gift cards: Five tips

November 12, 2011|By Scott J. Wilson, Los Angeles Times
  • Bank gift cards now carry some consumer protections, but watch out for fees.
Bank gift cards now carry some consumer protections, but watch out for fees. (Michael Conroy, Associated…)

Bank gift cards, which resemble credit cards and can be used in a variety of shops, were almost entirely unregulated until late last year. Now there are at least some consumer protections on these cards, which carry the MasterCard, Visa, American Express or Discover logos. Some things to know:

• Bank gift cards can't expire for at least five years after purchase, according to the new federal rules. And if money is added to a card, that new money can't expire for five years from the date added, even if the expiration date on the card comes sooner.

• If the card expires before the added money does, you can get a replacement card from the issuer for no charge.

• You cannot be charged an "inactivity" or "dormancy" fee on a bank gift card unless it has not been used for 12 months. Even then, you can be charged only one fee per month.

• There are still no rules concerning the fees charged to purchase a bank gift card. These purchase fees are typically $3 to $7 per card.

• The federal rules apply to single-store gift cards too, but no worries in California. State laws, which supersede the federal regulations, prohibit any fees being charged for the purchase or use of store gift cards, and they can't carry expiration dates.

scott.wilson@latimes.com

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