(NC) Do you want to give someone a gift but don’t know exactly what to choose? A prepaid card could certainly be the solution. But be sure to check carefully before choosing this option, because these popular products do not all work the same way.
Each prepaid card has different terms and conditions. Check the expiry date and any fees or limits. Be sure to provide the recipient with the terms and conditions and proof of purchase. Depending on the type of prepaid card, there may be fees for activating the card, making purchases, checking your balance, withdrawing cash from an ATM, reloading the card or keeping it if you don’t use it for a period of time.
“Some fees may reduce the value of the prepaid card,” explains Lucie Tedesco, commissioner of the Financial Consumer Agency of Canada. She advises always reading the conditions to know what fees apply and avoid surprises.
There are two main types of prepaid cards, which are sometimes called gift cards. Below is some information to know beforehand about both types.
Prepaid cards issued by financial institutions. These are linked to payment card networks such as American Express, MasterCard and Visa. You can use these cards at most merchants that accept credit cards from the same network. The funds on the card do not expire, but the card itself might. If this happens, you might have to pay a fee to transfer the remaining funds to a new card. You can reload the card as many times as you like until its expiry date, but you might have to pay a fee to do so.
Store prepaid cards. These can be used in a given store or group of stores only. They usually have an expiry date, and you cannot reload or withdraw from them.
Find more information at canada.ca/money.