Gift Card Vs. Prepaid Debit Card: What’s the Better Gift? Advertiser disclosure You’re our first priority. Every time. We believe everyone should be able to make financial decisions without hesitation. Although our site does not feature every business or financial product on the market We’re pleased that the advice we provide and the information we offer and the tools we develop are independent, objective, straightforward — and completely free. So how do we make money? Our partners pay us. This may influence which products we write about (and the way they appear on the site) However, it doesn’t affect our advice or suggestions that are based on many hours of study. Our partners do not promise us favorable reviews of their products or services. . Gift Card Vs. prepaid debit card: Which is the Better Gift? Gift cards are the obvious winner in a gift of cash. Prepaid debit cards are more than bank accounts. This article was written by Spencer Tierney Senior Writer | Certificates of Deposit ethics, banking ethical, deposits Spencer Tierney is a consumer banker at NerdWallet. He has been writing about the personal financial sector since, with a particular focus on certificates of deposit, as well as other banking issues. The work he has written for him was highlighted by The Washington Post, USA Today, The Associated Press and the Los Angeles Times, among other publications. The location is 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, most recently at U.S. News & World Report. She started her journalism career with The Washington Post and later worked for Roll Call, McClatchy-Tribune and The Seattle Times. Sara has been featured as a guest on SiriusXM Business Radio and iHeartMedia’s WHO Newsradio and has been mentioned by The Salt Lake Tribune, The St. Paul (Minnesota) Pioneer Press and other publications. She graduated from the University of Maryland’s Philip Merrill College of Journalism. Email:
. A majority or all of the items featured here come from our partners who compensate us. This affects the products we feature and the location and manner in which the product is featured on a page. However, this does not affect our assessments. Our views are our own. Here’s a list and . Cash is a simple gift idea, but the shape it should take is another question. The idea of putting bills in an envelope may be a good idea however it’s not the best option: There’s no way to retrieve cash in the event that it’s stolen or lost. Plus, it’s easy to forget it was given as a gift after it’s placed in a purse. It’s better to store cash in plastic cards is better when you make the right choice in between gift card and debit cards that are prepaid. Learn more about. Gift cards vs. prepaid debit cards Let’s begin by describing what they have in common: Both are prepaid cards, meaning you put money on the card prior to spending at physical and online stores. They also provide protection against losses if you have them registered in your name. It is possible to find both kinds of cards within the same aisle of a shop, such as Walgreens and Target, so make sure you know which one you’re buying. The primary difference between a gift card and prepaid debit card is that a gift card is only a single-use credit card and a prepaid debit card is a rechargeable payment option that has most features and fees associated with a checking account as well as linked debit cards do. The primary function of gift cards is: 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 aren’t reloadable. The debit cards that are prepaid have a range of jobs: make purchases; withdraw cash at ATMs, banks, or retail stores; and utilize web features such as bill pay. They are also reloadable. Because of their flexibility, prepaid debit cards can be used as budgeting tools, or even as replacements to checking account. They’ve traditionally been for curbing spending too much, but in recent times, there’s been increased amounts (a common cost when excessive spending) and also to help track spending. More The winner gift cards. Gift cards live up to their word they are they are gifts. Their simplicity is part of why they’re a good choice to gift. However, there’s a second reason. Prepaid debit cards typically have monthly fees like checking accounts and the fees, often between $5 and $10, could amount to up to $120 annually. It could also include other charges, such as transaction or inactivity charges. The gift card is the most suitable option, but they’re not all equally good deals. General-use gift cards, such as those from Visa and Mastercard are typically accompanied by one upfront cost, usually called a purchase or activation fee, which the gift recipient is required to pay. The cost could range from $2.95 to $5.95, depending on the amount that is added on the card as determined by a sampling of gift card websites. There are usually no additional charges after purchasing. There are some exceptions. A bank may offer general-use gift cards that have renewal fees or inactivity fees. These could be charged on a monthly basis after a year of no card usage. You can avoid the majority, if not all, charges by purchasing a gift card from a store. In general, understand the terms and fees on the gift card prior to you purchase it to ensure that your holiday gift brings pleasure without fees. The author’s bio: Spencer Tierney is an expert on deposits and certificates at NerdWallet. The work of Spencer Tierney has been featured on USA Today and the Los Angeles Times. Similar to… Get an account that is more suitable for checking View NerdWallet’s recommendations for the top checking accounts. Go deeper into Banking Get more smart money moves delivered straight to your inbox Sign up and we’ll send you Nerdy posts about the money topics that matter most to you as well as other methods to help you get more out of your money.
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