The Federal Reserve Board announced their endorsement of the final rule for the Credit Card Accountability Responsibility and Disclosure (CARD) act relating to the uses of gift cards, gift certificates, and general-use prepaid credit cards. The new rules are to go into effect on August 22, 2010. The only exceptions to this rule are for the pre-paid cards purchased before April 1, 2010. These new rules will go into effect on January 31, 2011, so long as they have met specific requirements.
The new rule for these prepaid credit cards, gift cards, gift certificates, or store issued gift cards are that they can’t expire in less than five years from the last time funds were loaded on them and there are new limits to certain fees. An inactivity fee for example, would not be able to be charged until it has been unused for over a year. These cards need to disclose the fees, expiration date and toll-free contact number on the card itself.
These new gift card and prepaid credit card rules will help consumers to save money because of excessive fees and loss of funds do to expiration dates that were many times too short in duration.
While this may be an option for some, it may not be the answer for all-especially for those who use their credit cards on a regular basis. The other thing to consider is that the gift card that you may purchase, although with good intentions, one should carefully consider if the place that the card was brought from the recipient will in fact make use of it.
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