Gift Card or. Prepaid Debit Card: Which is the Better Gift? Advertiser disclosure You’re our first priority. Everytime. We believe everyone should be able to make sound financial decisions without hesitation. And while our site does not feature every business or financial product available on the market We’re pleased that the guidance we offer as well as the advice we provide and the tools we create are independent, objective, straightforward — and free. So how do we make money? Our partners compensate us. This can influence the products we review and write about (and the way they appear on our website) However, it does not affect our recommendations or advice that are based on hundreds of hours of study. Our partners do not pay us to guarantee favorable ratings of their goods or services. . Gift Card or. A Prepaid Credit Card Which is the best gift? Presenting gift cards is the clear winner when it comes to a simple exchange of cash. Prepaid debit cards function similar to bank accounts. This article was written by Spencer Tierney Senior Writer | Certificates of deposit and ethical banking, as well as banking deposit accounts Spencer Tierney is a consumer banker at NerdWallet. He has covered the personal financial sector since, with a focus on certificates of deposit and other banking-related issues. His work has been covered on The Washington Post, USA Today, The Associated Press and the Los Angeles Times, among other publications. He is located in Berkeley, California. Dec 22nd, 2022 Edited by Sara Clarke Assistant Assigning Editor | Banking Sara Clarke is an editor who joined NerdWallet with two years of experience in newsrooms. She was most recently with U.S. News & World Report. She started her journalism career working at The Washington Post and later worked for Roll Call, McClatchy-Tribune and The Seattle Times. Sara has appeared as a guest on SiriusXM Business Radio and iHeartMedia’s WHO Newsradio and has been quoted by The Salt Lake Tribune, The St. Paul (Minnesota) Pioneer Press and other publications. She earned her degree from the University of Maryland’s Philip Merrill College of Journalism. Email:
. A majority or all of the products featured here are from our partners, who we pay. This impacts the types of products we write about and the location and manner in which the product is featured on a page. However, this does not influence our opinions. Our views are our own. Here’s a list and . Cash is an easy gift option, but what form it should take is another question. Putting bills into an envelope may work however, it’s not the most ideal It’s impossible to recover cash if it gets lost or stolen. It’s also easy to forget it was given as a gift after it’s placed in a purse. Storing cash on plastic cards is more secure, provided you choose wisely among gift cards or prepaid debit cards. This article will help you understand. Gift cards are different from. pre-paid debit cards Let’s begin by describing how they’re similar both are pre-paid cards, which means that you can put money into the card ahead of time for spending at physical and online stores. They also provide protection against loss if you register them in your name. You might see both types of cards within the same aisle of a retailer, like Walgreens So make sure you know which one you’re purchasing. The major distinction between a giftcard and a prepaid debit cards is that it’s only a single-use credit card and a prepaid card is a reloadable option that has most features and costs that a checking account and a linked debit card have. Gift cards have one job: to buy goods at a dedicated store brand or at any store which accepts a payment system like Visa, Mastercard or American Express. They don’t allow cash withdrawals, and most aren’t refillable. The debit cards that are prepaid have a range of functions: they can make purchases, withdraw cash at ATMs, banks or certain shops; or utilize online features like bill pay. They can also be reloaded. Because of their flexibility they can be used as budgeting tools, or even replacements to checking account. They’ve traditionally been for curbing overspending, but in recent years there have been more (a common cost when spending too much) as well as to aid in tracking spending. More The winner Gift cards Gift cards are true to their word: presents. Their simple nature is what makes them better to gift. However, there’s a second reason. Prepaid debit cards typically are subject to monthly fees, similar to checking accounts and these fees, typically between $5 and $10, could add up to $120 annually. There could be other fees as well, such as transaction or inactivity fees. It’s a most suitable option, but they’re not all equally great deals. Gift cards for general use like those offered by Visa and Mastercard are typically accompanied by an upfront fee, commonly known as a purchase or activation fee, which the gift giver would be required to pay. The cost could range from $2.95 or $5.95 dependent on the amount that’s added on the card as determined by the gift card’s websites. But there aren’t usually other charges after purchasing. There are exceptions, though. A bank may offer general-use gift cards, which have renewal fees or inactivity charges, which could be charged on a monthly basis after a year of no card use. It is possible to avoid most or all fees by buying a specific brand-name gift card. Be aware of the terms and conditions of a gift card before you purchase it to ensure that you can give your gift with happiness without any fees. Author bio Spencer Tierney is an expert on deposits and certificates at NerdWallet. The work of Spencer Tierney has been covered in USA Today and the Los Angeles Times. In a similar vein… Find a better checking account View NerdWallet’s top picks for the best checking accounts. Explore Banking even more deeply. Find more money-saving strategies delivered straight to your inbox Sign up and we’ll send you Nerdy articles on the topics in finance which matter to you the most and other strategies to help you get more out of your money.
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