Here’s Why Gift Cards are Part of Credit Reform

Gift cards as Christmas gifts have been increasing in popularity, but so have their “hidden inactivity fees” – the reduction of a card’s stated value if it is not redeemed within a specified period of time. The sweeping credit card reform laws set to take full effect Feb. 22 address these fees, but they only prohibit charging inactivity fees on gift cards if they have been used within the past 12 months. After twelve months of inactivity, card issuers will be allowed to charge a monthly inactivity fee.

Federal Reserve Proposes Restrictions on Gift Card Fees

The Fed announced today proposed rules that would restrict the fees and expiration dates that are normally applied to gift cards. But the rules won’t take effect until February of next year, missing out on the 2009 Christmas shopping season.

American Express Cuts Monthly Fees on Gift Cards Permanently

In a move that will force the hand of its competitors this holiday season and beyond, American Express has elmininated montly fees on its gift cards, permanently. It is the first gift card issuer to wipe out all fees after purchase