Gift Card vs. A Prepaid Credit Card What’s the Better Gift? Advertiser disclosure You’re our first priority. Every time. We believe that every person should be able to make financial decisions with confidence. And while our site does not feature every business or financial product available on the market however, we’re confident that the guidance we offer and the information we offer and the tools we create are objective, independent simple, and free. So how do we make money? Our partners pay us. This can influence the products we write about (and where those products appear on our website), but it in no way affects our advice or suggestions, which are grounded in many hours of research. Our partners are not able to be paid to ensure positive review of their services or products. . Gift Card Vs. Prepaid Debit Card: Which is the best gift? Gift cards are the clear winner for a straightforward gift of cash. Prepaid debit cards are more like bank accounts. This article was written by Spencer Tierney Senior Writer | Certificates of deposit, ethical banking, banking deposit accounts Spencer Tierney is a consumer banking writer at NerdWallet. He has been writing about personal finance since 2013, with a particular focus on certificates of deposit, as well as other banking topics. He has had his work featured on The Washington Post, USA Today, The Associated Press and the Los Angeles Times, among other publications. He is located in Berkeley, California. Dec 22nd, 2022 Edited By Sara Clarke Assistant Assigning Editor | Banking Sara Clarke is an editor who joined NerdWallet with more than two decades of experience working in newsrooms, including U.S. News & World Report. She began her career in journalism with The Washington Post and later worked for Roll Call, McClatchy-Tribune and The Seattle Times. Sara has appeared as a guest on SiriusXM Business Radio and iHeartMedia’s WHO Newsradio and has been mentioned in The Salt Lake Tribune, The St. Paul (Minnesota) Pioneer Press and other outlets. She graduated at the Maryland University’s Philip Merrill College of Journalism. Email:
. Many or all of the products featured here are from our partners, who we pay. This influences which products we feature and where and how the product appears on a page. But, it doesn’t affect our assessments. Our opinions are entirely our own. Here’s a list and . Cash is an easy gift idea, but the format it should be in is another question. The idea of putting bills in an envelope may work however it’s not the best option It’s impossible to recover cash if it is stolen or lost. It’s also easy to forget cash was a gift once it’s placed in a purse. It’s better to store cash in plastic cards is a better option when you make the right choice in between gift card and debit cards that are prepaid. Learn more about. Gift cards and. prepaid debit cards Let’s begin by describing what they have in common They’re both pre-paid cards, which means that you can put money into the card prior to shopping at both stores in stores, both physical and online. They also provide protection against loss if you register them under your own name. You might see both types of cards in the same area of a shop, such as Walgreens, so be sure to be aware of which you’re purchasing. The main distinction between a giftcard and a prepaid debit card is that it’s a one-time spending card, and a prepaid card is a rechargeable payment option with the most features and fees that a checking account and linked debit cards have. The primary function of gift cards is that is to purchase goods from the brand of a specific store or any retailer which accepts a payment system such as Visa, Mastercard or American Express. They do not allow cash withdrawals and aren’t rechargeable. Prepaid debit cards have many functions: they can make purchases, withdraw cash from ATMs, banks or retailers; as well as use online features like bill pay. They can also be reloaded. Due to their versatility the prepaid debit cards could be used as budgeting tools, or even replacements for checking accounts. They’ve traditionally been for curbing spending too much, but in recent times, there’s been more (a common cost when overspending) and also to aid in tracking spending. More: Winner: Gift cards. Gift cards correspond to their title: gifts. Their simple nature is the reason they are a better choice to give. But there’s another reason: Prepaid debit cards generally are subject to monthly fees, similar to checking accounts and the charges, usually between $5 and $10, can be as high as $120 annually. There may be as well, such as transaction or inactivity fees. It’s a most suitable option, but they’re not all equally good deals. Gift cards for general use, such as those from Visa and Mastercard are typically accompanied by one upfront cost, usually known as a purchase or activation fee, which the gift recipient is required to have to pay. The cost could range from $2.95 or $5.95, depending on the amount that is added to the credit card as determined by the gift card’s websites. But there aren’t usually other fees after purchase. There are some exceptions. Some banks offer general-use gift cards that have replacement card fees or inactivity charges, which could be charged on a monthly basis after a year of no card usage. You can avoid the majority of, if not all fees by buying a specific brand-name gift card. Be aware of the terms and fees on the gift card before you purchase it, so that your holiday gift brings pleasure without fees. About the author: Spencer Tierney is an expert on certificates of deposit at NerdWallet. The work of Spencer Tierney has been highlighted in USA Today and the Los Angeles Times. Similar to… Find the best checking account NerdWallet’s top picks for the best checking accounts. Dive even deeper in Banking Find more money-saving strategies delivered straight to your inbox. Sign-up and we’ll send you Nerdy articles on the topics in finance that are important to you and other strategies to help you get more from your money.
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