New Law Makes Gift Cards Friendlier

gift-cardGift cards have long been a popular option for holiday shoppers who are short on time and bereft of ideas. But in the past, givers had to make a difficult choice. Gift cards from credit-card issuers or banks could be used almost everywhere but were often loaded with expiration dates and inactivity fees. Retail cards were usually free of such restrictions but required givers to select an appropriate retailer — a challenge if you had trend-conscious teenagers on your list.

This holiday season, the choice will be a little easier. The Credit Card Accountability, Responsibility and Disclosure Act enacted last year imposed new restrictions on gift cards that are designed to make them more consumer-friendly. Under the CARD Act, gift cards sold after Aug. 22, 2010, can’t expire in less than five years. The law also bars issuers from charging an inactivity fee unless the card has been dormant for at least 12 months. In the past, some gift card issuers deducted inactivity fees after just 30 days. Issuers are also barred from charging a fee to replace a lost or stolen card.

These restrictions could eliminate a lot of unpleasant surprises that have soured consumers on gift cards. But if you’re planning to give gift cards this year, there are still some drawbacks you should be aware of, including: Full story in APP.

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