Ad Disclosure

Types of Gift Cards: Which Is Right For You?

Types Of Gift Cards

We’re all familiar with gift cards; they’re basically ubiquitous. After all, there were an estimated $126 billion in gift cards sold during 2014, which means U.S. consumption of gift cards is more than the GDP of 133 countries. Gift cards aren’t all created equal, though. They differ from one another based on their issuer and the manner in which they are delivered. Understanding how your gift card is structured will enable you to maximize its value.

Types of Gift Card Issuers

Store Gift Cards: Most stores these days have their own gift cards. Consumers can typically purchase them in store or online. Many credit card companies also enable you to redeem rewards points or miles for store-issued gift cards. These gift cards can only be used at the stores whose branding they bear.

Card Network Gift Cards: Gift cards issued by card networks like Visa or American Express can be used anywhere the particular card network is accepted. The one other major difference between card network gift cards and store gift cards is that network gift cards typically charge some sort of fee, usually in the form of an up-front or transaction-based charge. It is very important to determine what, if any, fees a given card charges before getting it in order to avoid seeing your balance get drained.

Types of Gift Card Delivery

Plastic Gift Cards: The vast majority of gift card sales involve an actual piece of plastic onto which a certain amount is loaded and then drawn from like a debit card. Plastic gift cards can be swiped at the point of sale like a credit card, and many websites also enable you to enter in your card number in order to pay online.

Virtual Gift Cards: Virtual gift cards are delivered via email and provide you with a card number and PIN to use when shopping with your gifted funds. They are a great option for last-minute gift giving. Virtual gift cards also preclude the need for retailers to invest in physical plastic, which makes offering a gift card far more accessible for smaller businesses. The one drawback that virtual gift cards have compared to their plastic counterparts is that a lot of retailers only allow customers to use them online and not in their physical stores.

No matter what type of gift card you get, it is important to remember that the funds loaded onto your card cannot expire for five years. Judging from the fact that more than $43 billion in gift cards have gone unused since 2005, you might therefore have some untapped value lying in your drawer right now.
Image: joingate/Shutterstock

Editorial Disclaimer: Editorial content is not provided or commissioned by financial institutions. Opinions expressed here are the author’s alone and have not been approved or otherwise endorsed by any financial institution, including those that are CardHub advertising partners. Our content is intended for general educational purposes and should not be relied upon as the sole basis for managing your finances. Furthermore, the materials on this website do not constitute legal advice and should not be relied upon as such. Please let us know if you have any questions or suggestions.

Ad Disclosure: Offers originating from paying advertisers are noted as “Sponsored” on the offer's details page. Advertising may impact how and where offers appear on this site (including, for example, the order in which they appear). At CardHub we try to list as many offers as possible but we don't make any representation of listing all available offers.

Previous The Pros & Cons of the CFPB’s New Rules for Prepaid Cards   Annual Percentage Rate: What It Is, How It Works and What to Avoid Next