Law makes this year's gift cards more consumer-friendly

[RamboLiberal]

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This holiday season, the choice will be a little easier. The Credit Card Accountability, Responsibility and Disclosure Act enacted last year imposed new restrictions on gift cards that are designed to make them more consumer-friendly. While surveys show that consumers love to give and receive gift cards, billions of dollars are lost every year because of expiration dates, inactivity fees or misplaced cards.

Under the CARD Act, gift cards sold after Aug. 22, 2010, can't expire in less than five years. The law also bars issuers from charging an inactivity fee unless the card has been dormant for at least 12 months. In the past, some gift card issuers deducted inactivity fees after just 30 days. Issuers are also barred from charging a fee to replace a lost or stolen card.

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Penalties. While the CARD Act restricts inactivity fees, it doesn't eliminate them. Consumers who let their gift cards languish for a year or longer could still get hit with fees, which are typically subtracted from the value of the card. Most of the general purpose cards in the Bankrate survey charge a $2.50-a-month inactivity fee if the card isn't used after 12 consecutive months. Only one of the retail cards in the survey, Pilot Travel Centers, charges an inactivity fee.

•Confusing disclosures. The CARD Act mandates that all gift card issuers must provide specific information on the back of their cards, including fees, expiration dates and a toll-free number. In July, though, Congress agreed to extend the disclosure deadline until Jan. 31, 2011, for gift cards produced before April 1.

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