A gift card is a type of prepaid debit card with a validity period and enables the holder to buy things or services of their choice.
Introduction
A gift card has a fixed amount of money and can make a variety of purchases ranging from products to services.However, gift cards are not the same as gift vouchers.
Different Types of Gift Cards
Gift cards are classified into open-loop gift cards and closed-loop gift cards.
An open-loop card, also called a general gift card, is a general-purpose card used to make purchases across various brands and are similar to cash or credit/debit cards.
On the other hand, a closed-loop card or a single-purpose card is company or brand-specific; you can only buy products or services from a particular company or brand.
Both open and closed-loop cards are prepaid gift cards, open-loop cards are preferred over closed-loop cards because of the limited buying options in closed-loop cards.
While open-loop cards are reloadable, single-use cards.
Types of gift cards that you can buy using a credit card
With a credit card, you can buy two kinds of gift cards:
- Cash Card
- Stored Value Card
A cash card is an electronic payment card that stores money for payments. Unlike debit cards, prepaid debit cards, payroll cards, and Cash cards are not limited to gift cards and do not include credit cards.
A stored-value card is a type of preloaded electronic debit card that is a convenient alternative to non-cash payment cards. They are issued by credit card networks, bank card issuers, and retail merchants; the stored value cards issued by card networks are similar to open-loop cards, while the ones issued by retail merchants are like closed-loop cards.
Where can you buy a gift card using a credit card?
You can buy gift cards from retailers like Amazon, Target, Walmart, The Home Depot, Walgreens, CVS, Simon Malls, and GiftCards.com. Apart from retailer gift cards, you can also apply for gift cards issued by banks, which can be reloaded by paying a fixed fee.
Before buying a gift card, you should consider a few things: the acquisition costs vs. actual price, reward points, etc.
Retail merchants selling gift cards may charge an additional credit card and maintenance charge.
Conclusion
Gift cards are an ideal gift. While you can buy them with a credit card, it is crucial to note that not all retailers have this facility. You should always make sure if you have to pay any extra fees when you buy one. Make sure if you have to pay any extra fees when you buy one.