Store-branded gift cards charge fewer fees than rivals

Store-branded gift cards charge fewer fees than the all-purpose versions issued by banks and credit card companies, according to new research released by Bankrate.com. Of the 55 widely held store-branded gift cards that Bankrate examined in its 2012 Gift Card Survey, only 9 percent charge a purchase fee, and only 2 percent charge a dormancy or maintenance fee.

Bankrate surveyed eight prominent gift cards offered by banks and credit card companies, and all of them charge a purchase fee ranging from $2.95 to $6.95. Some 75 percent charge a dormancy or maintenance fee (up to $3 per month) if the card is unused for 12 or more months.

“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. “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.”

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Bankrate.com