What are Prepaid Visa and Mastercard Gift Cards? Prepaid cards and gift certificates sound alike, since you can stash money on each of them. But they actually have some key differences. For starters, prepaid cards are winning the popularity contest. The cards, that are reloadable, are adding more www.prepaidgiftbalance.com, even though you may pay dearly for the privilege. Meanwhile, gift certificates, which can be 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 certificates to eventually fall through the wayside as prepaid cards grow in popularity, along with their uses. For now, both cards get some overlap since they can both be employed to control spending. “They could be a bank checking account alternative,” Van Dyke says.
Below are a few key differences to learn when looking for either card. Prepaid Gift Card Flexibility. Gift cards are usually limited to purchases in a retailer, says Greg McBride, CFA, chief financial analyst at Bankrate.com. Typically, big retailers – and even smaller ones in departmental stores – offer the cards for purchases at those locations. The cards are excellent deals for that buyer or even the recipient, says McBride. The reason why: A $100 gift card translates into $100 of purchasing power.
“So there is a lot more flexibility in your spending,” adds Harrine Freeman, a financial counselor at Maryland-based H.E. Freeman Enterprises. But they are more likely to carry fees, according to CreditCards.com, which is owned by Bankrate.
You can even easily buy, sell or trade gift cards online, Freeman says. And after the Bank Card Act was passed during 2009, gift card expirations were extended to five-years right after the activation date. On the downside, gift cards could be overly simple. They usually don’t include account management tools and can be utilized just once, Van Dyke says.
Conversely, McBride says, prepaid cards can be used as an array of transactions including making withdrawals from ATMs. To allow them to sometimes be utilized as bank account substitutes, which explains why their popularity is quickly rising. Prepaid cards can also be loaded online or at retail locations.
Increasingly more banks, including PNC, U.S. Bank and JPMorgan Chase & Co., offer their particular prepaid cards, in accordance with the Consumers Union. The cards are usually easy to get simply because you don’t need a banking account or a credit history.
People counting their pennies may use prepaid cards as budgeting tools by loading vacation funds onto them, McBride says. Some prepaid cards also offer free online bill pay, which could save consumers money, according to Consumers Union. In order to collect points for shopping, some prepaid cards even offer rewards programs. “But I’ve never seen a great gift card that provides rewards,” Van Dyke says.
Prepaid Cards Fees. For the budget-minded, gift cards normally have only low or no fees. However, prepaid card fees vary widely and will quickly ding you. “Some prepaid cards work like good atm cards, because they have low fees or waived fees,” Javelin’s Van Dyke says. “However, should you pick the wrong card, you can end up with a lot of fees.”
McBride says the most prevalent prepaid fees are activation fees, ATM access fees and monthly service fees. In accordance with Bankrate’s 2014 Prepaid Card Survey, 83 percent from the cards surveyed charged monthly maintenance fees. And 53 percent have activation fees, ranging from $2.95 to $9.95. Unlike gift certificates, https://www.prepaidgiftbalance.site/www-prepaidgiftbalance-com/ that sit unused in a drawer uryelx start logging fees. “So, you need to evaluate how you’ll be using the credit card,” McBride says.
Gift certificates which can be lost or stolen may mean the buyer loses out. “A thief can access all of the money on the card,” says Freeman. However, if you’ve registered the card, you can find a number of your money back, however you may also be charged a fee, she says. One caveat: Gift certificates issued with Visa or MasterCard logos are protected by bank card laws. And state laws governing gift certificates also can put in a layer of protection, including requiring more disclosures or the legal right to redeem a card for cash, in accordance with the Consumers Union.
Prepaid cards may offer more consumer protections than gift cards, but rules vary. Often, fraud protections are merely “vaguely defined,” in accordance with the Consumers Union report. And prepaid card protections may be voluntarily withdrawn whenever you want.