The use of gift cards and prepaid cards has increased, most likely due to the convenience of using them instead of cash. Unlike other forms of gifts that you will be sure if the recipient will appreciate, you can never be wrong with gift cards. Prepaid cards have also become very popular where they will be used in place of checking accounts or even as a gift card.
Here are the differences between a gift card and a prepaid card to help you understand them better:
A gift card is linked to a certain retailer and to use it, you can only go to that retailer to make your purchases. There are some gift cards, however, that will be used in other retail outlets though they are very few.
Prepaid cards can be used in any store as long as that card brand is accepted. For instance, you can use a MasterCard, Visa Card, or even American Express wherever they will be accepted.
Loss of the card
If you misplace a gift card, it will be possible for another person to pick the gift card and use it to make purchases in the store indicated on the card. The only way you can prevent this from happening is by registering it immediately after buying it.
A prepaid card is safer as most of them have fraud protection guaranteed. If you lose a prepaid card and report the loss immediately, no one will be able to use it to make any purchases.
A gift card can last for up to five years without expiring according to the CARD act. Any fee charged on the card after the end of one year is most likely to affect the balance.
A prepaid card has a lifespan of 6 months and if you do not use it, the contained value will drop as monthly fees are charged.
The choice of either a gift card or a prepaid card will be determined by how and where you want to use it. Make an informed choice based on the above differences and you will discover the convenience of using either of them.