Gift Giving Guy

The new credit card law President Obama signed on May 22, 2009 gave Americans a surprise present: improved safeguards for gift cards. Starting in February 2010, gift card issuers must follow new rules for plastic and electronic gift cards and gift certificates. And that includes the bank gift cards that carry the Visa, MasterCard, American Express and Discover logos. (I’m not a fan of the bank gift cards, but this federal law might make them more consumer friendly next year. Even with the law, bank cards may still charge a one-time “issuance” fee.) The new rules for gift cards:

• Gift cards must stay active for five years, starting as soon as money is put on the gift card.
• If the gift card expires after five years, gift card sellers must disclose the terms of expiration to buyers before selling the card. Also, expiration information must appear on the gift card in all caps and 10-point font size.
• Monthly fees due to inactivity cannot be charged unless the card remains dormant for 12 months. The law caps the monthly fee at $1.

Keep in mind, this new law does not affect prepaid cards for telephone services, rewards/loyalty cards, paper gift cards or paper gift certificates. With these new changes, your giftee will have more time and keep more value on gift cards you give.