There may be some gift cards to watch out for this holiday season.
All-purpose cards issued by banks tend to charge more fees than their store-branded counterparts, according to a study released today by Bankrate.com.
Bankrate surveyed 63 gift cards in early October of this year. Only five of the 55 store-branded gift cards in the survey charged a fee to purchase.
The other eight cards surveyed were general-purpose cards issued by financial institutions like Wells Fargo, Discover and KeyBank, all of which charged fees ranging from $2.95 to $6.95.Comment on this story
“The key takeaway for consumers is that they’re going to get the most value from store-branded gift cards,” said Janna Herron, credit card analyst at Bankrate.com, in a statement. “The benefit of general-purpose cards offered by banks and credit card companies is that they can be used anywhere, but because of the fees, you would be better off giving cash.”
Gift cards offered by banks also charge dormancy or maintenance fees more often than others, with 75 percent charging fees up to $3 per month if the card is unused. Only two percent of store-branded cards charge these fees.