Credit Gift Cards, The Worst of Both Worlds
By Randall | January 17th, 2008 | Category: Uncategorized | 9 comments 811 views | 9 Comments » |
I think I’ve mentioned before how I don’t like gift cards so this little story shouldn’t come as a surprise.
As bad as gift cards are with their pre-paid loss of interest, I’ve found that prepaid credit cards are even worse. A prepaid credit card is identical to your normal credit card, but with a specific amount already applied to it. They come in the regular flavors (Visa, MasterCard, and now American Express) and can have any amount of money put on them.
The also have most of the same drawbacks of the normal gift cards;
- The money doesn’t earn you interest.
- If you lose the card it’s difficult or impossible to get your money back.
- You end up spending ‘more’ to get that last little bit of money off the card or,..
- You leave a little bit of money on the card rather than overspend to get it off.
- The card (and amount) expires, though this is less prevalent today than before.
The Story
This takes place a couple of Christmas’ ago, but still holds true today. My wife and I got a couple of gift credit cards for our nephews (teenagers) thinking that this would be better than sending them a gift card for a specific amount, and be a little cooler than just sending a check in their cards like we usually did. (They live on the other side of the nation than we do, so visits are VERY infrequent).
We went to the Bank of America web site and purchased a couple of pre-paid credit cards for $25 each, and had them delivered to the house. The web site was ok, and there weren’t any problems with the delivery.
The boys got the cards by Christmas ok, but when they went to spend them, half of the stores said they weren’t any good. Now I can understand if ALL the stores rejected them, but why only some of the stores?
When they called Bank of America about just getting cash off the cards, they were told that they couldn’t get cash off of the card. Only the purchaser of the card could do that. In addition, only the purchaser could make inquiries as to why the stores wouldn’t take the cards.
Since my wife and I purchased the cards, it was BACK TO US to figure out what was going on. And since we no longer had the cards, we had to get the credit card numbers and info from the boys to call. Once we did that, we got a HUGE runaround, with the final statement ‘nothing’s wrong with the cards’. That was it, No explanation as to why the stores wouldn’t accept the cards.
Needless to say we weren’t thrilled. After a couple more calls to different divisions inside of Bank of America, we got no further information and had wasted about 2 hrs of time.
At that point, we gave up and mailed the boys a check.
Total Loss;
- 2 hrs of time
- $32.50 in money trapped on the card
- Bank of America’s good name with Credit Gift Cards.
So if you’re thinking about sending that relative or friend a gift credit card, just keep in mind that even today it’s not a seamless deal.
Do you have any credit gift card stories? We’d love to hear them. Drop us a comment.
My 14 year old daughter go a Visa gift card for Christmas this year and she tried to buy a purse off of a website not knowing that Verisign requires an actual name and billing address so the purchase did not go through. What did go through was the full charge for the purse and shipping and neither Verisign, visa nor the website will admit to having the money but we can see the charge on her online account statement.
Actually, in this case, I am counting it as a good lesson for her because she is calling all of these companies herself to get it worked out. If it were me I might have just given up but she has reminded me that $20.63 is not worth throwing away.
@MMM,
Couldn’t agree more. It taught US never to do that again too!!
My employer gives those stupid things out as “prizes” to contests won. The worst part is that it gets taxed as income! Also, I usually end up leaving a dollar or two on it. Since they go through as a “credit”, I can’t charge more than the card is worth or the store will deny it. So frustrating!!!
Raymond at Money Blue Book has recommended using Red envelopes to give money in the Chinese fashion. Pretty and gift-like but no snafus even of getting a check cashed. And so much prettier than plain envelopes.
I hate credit card gift cards. When we bought new cell phones, one came with a $30 rebate in the form of a visa gift card. I had the hardest time finding someone to accept that card. I don’t think I ever did use the whole balance!
Hi,
Not much of a story here, but my mom bought me a $50 gift card to a Simeks (meat) store. I didn’t use it right away, and, to my chagrin, Simeks closed all of their stores two months later! Since they were still making food, just selling it in grocery stores instead of their own stores, I called the number on the back of the card to find out what to do.
The lady I talked to was very nice, except that she required me to send her the card in the mail so that she could read the magnetic strip in order to be able to send me the right amount of “coupons”. I did this, and received $50 worth of coupons for free Simeks merchandise in the mail. It all worked out, right?
So I took the two $25 coupons to the grocery store to “buy” my stuff.
I got to the checkout, and the store won’t let me use the entire $50 worth of coupon, because a) the small print says “One item per coupon”, and the other small print says “Not good towards purchase of [blah blah], which was, of course, what I had chosen to purchase. I got what I could, left the store, and learned a valuable lesson about gift cards.
@Everyone,
That’s mainly why I hate these things. The companies have taken what SHOULD be a good idea/thing, and through inept implementation or followthrough have RUINED the experience for the public.
Credit gift cards coulda been a contender,..
Vanilla Visa cards (any really) are pretty terrible. First there is a $4.95 activation fee and if you don’t spend it ALL within the first 7 mos, you get charged $2.50 a month user fee. What’s the point?