credit card advice
Some people are easy to shop for, but others never know what they want or don’t ever like what you buy them. Why not get them a prepaid credit card loaded up with the amount of money of your choosing?
This will act like a gift card until they run out of funds, and they can reload it if they want to continue using it.
Prepaid credit cards come with fees, some much more than others. If you plan to buy a prepaid credit card as a gift, try to choose a card with as few fees as possible to provide a better experience for the recipient.
Here are a few fees to be aware of as you decide which card to buy:
1. Activation fees
Some prepaid cards have fees for simply activating the card. If you’re giving a prepaid card as a gift that comes with an activation fee, see if you can activate the card yourself so the recipient won’t have to pay the fee.
2. Transaction fees
Believe it or not, some prepaid credit cards actually charge a fee every time you make a purchase with it. Some with these fees charge more on transactions with a PIN than signature transactions. Try to avoid a card with transaction fees so it doesn’t eat into the recipient’s gift money.
3. Monthly fees
It’s not uncommon for prepaid credit cards to have monthly usage fees or maintenance fees. Try to avoid a card with this fee if possible, or see if the fee goes away with certain behavior (for example, some cards have no fee if you make a minimum amount of monthly purchases).
With some cards, the fee varies based on whether they set up a direct deposit on that account.
4. ATM fees
Many prepaid credit cards have fees for withdrawing funds from ATMs. A few only charge this fee if you use out-of-network ATMs, and some do not charge a fee at all. But some charge a fee of several dollars no matter which ATM you use.
If you think the person you’re giving the card to will want to use it to withdraw funds from an ATM frequently, look for one with minimal ATM fees or one that has an option for free in-network ATMs.
“Your recipient will be grateful for the
flexibility to use the money how they want.”
5. Balance inquiry fee
You will find some prepaid cards charge a fee — usually around 50 cents — for a balance inquiry. If you aren’t able to avoid a card with this fee, you may want to make sure the recipient is aware of it.
Advise them to keep track of the balance on their own so they don’t waste gift money checking up on their balance.
6. Minimum balances
While not the norm, some prepaid credit cards also charge a fee if a minimum balance is not maintained. Try to avoid this type of card when giving it as a gift in case the receiver wants to use up the money without reloading the card.
7. Cancellation and inactivity fees
Not all prepaid cards have this fee but some do. Try to find a prepaid card that won’t require the gift recipient to cough up more money if they decide to take a break from the card or cancel it altogether.
As long as you find a prepaid credit card that keeps fees to a minimum, your gift recipient will be grateful for the flexibility to use the money how they want to.
Photo source: sheknows.com.