Giving Pre-Paid Cards As Holiday Gifts

It is sometimes difficult to buy a thoughtful present for everyone on your Christmas list. Perhaps it is time to take a different approach to shopping and give those people a pre-paid credit card as a holiday gift. These cards become popular several years ago. There are several different types, and each one has pros and cons.

Hidden Fees, Costs, And Drawbacks

Read the fine print when buying a prepaid card. There can be a number of hidden fees and costs associated with these cards. 

  • Some cards have a fee for calling customer service. If you call more than once per month, you may be charged a service fee.
  • Most cards have a fee for using them at an ATM. 
  • A number of cards have activation fees which need to be paid before the card can be used.
  • Some cards charge a percentage fee each time you utilize the card.
  • Cards can come with a monthly maintenance fee which can quickly deplete the balance on the card if you don't use it right away.

Make sure you read the fine print and understand the different costs and fees associated with the card before you give one as a gift.

The Plus Side To Pre-Paid

Despite the hidden fees, there are several benefits to giving pre-paid cards as a holiday gift:

  • Giving them to young adults can help them learn more about using a credit card and enhance their financial responsibility.
  • Some pre-paid cards come with extra benefits and protections much like a credit card which makes them safer and more attractive than cash.
  • Unlike cash, they can be used for online shopping.
  • They are more versatile than giving a gift card which limits the recipient to one store or a chain of stores.

Do They Make Good Gifts?

Yes, since they give the recipients the option to buy whatever they want. While it may not be the most personable gift, pre-paid cards can be a practical gift for nearly anyone on your holiday list.

This entry was posted in Consumer Tips and tagged , , by Natalie Rutledge. Bookmark the permalink.
The information contained within this article was accurate as of December 4, 2012. For up-to-date information on any of the terms, cards or offers mentioned above, visit the issuer's website.
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About Natalie Rutledge

Natalie Rutledge majored in Communications at Mississippi State University. She was in sales for a number of businesses and spent nine years working as a communications advisor to various entities. Natalie can be contacted directly at