The new CARD regulations impose strict limits on all credit card inactivity fees and gift card inactivity fees by requiring that all card issuers refrain from charging an inactivity fee (also called a dormancy fee) if the card has been used at least once within the prior 12 months.
Read some of the below unused gift card statistics and then let your New Year’s resolution be to not let any of your Christmas gift cards go unused!
Unused Gift Card Statistics
- The total aggregate volume of gift cards purchased in 2008 was $91 billion.
- The total aggregate volume of gift cards that are predicted to be purchased for all of 2009 is $87 billion.
- The highest percentage ever recorded for unused gift cards (called “spillage”, “spoilage”, or “breakage“) was 10% of all gift cards purchased in 2007.
- The percentage of unused gift cards for 2009 is predicted to be 6% and represents approximately $5 billion of unused gift cards.
- Over $100 million of gift cards were rendered useless or compromised in value in some way in 2008 because of the bankruptcies of Sharper Image, Linens ‘n Things, and other failed retailers with outstanding gift cards.
- It is estimated that Wal-Mart could have close to $1 billion of unused gift cards out in circulation.
- 61% of gift card holders spend more than the gifted amount.
- 75% of gift card shoppers spend 60% more than the value of the gift card.
- Purchases made with a gift card are typically between 20% and 50% higher than the average purchase price.
American Express Gift Cards Already Have NO Inactivity Fees
While the new gift card inactivity fee regulations mandated by CARD are not set to go into effect until 2010 American Express has already announced that each and every one of their American Express Gift Cards will have NO inactivity fees and NO monthly fees. (Another positive to gifting an American Express Gift Card is that the receiver can use the card anywhere that AmEx is accepted to buy pretty much anything and is not retailer specific).
Credit Card Inactivity Fees
As mentioned above the same CARD regulations that prohibit inactivity fees on gift cards used in the past 12 months also applies to credit cards. Be sure that you keep a tight rein on your credit cards and are fully aware of any fees, restrictions, and penalties that you may be subject to.
Prepaid & debit cards can be a good alternative to paying cash for everything because of the convenience and fraud protection that is inherent with debit card purchases but unless you use the 1% cash back debit card from Perkstreet Financial then you will be better served using a cash back credit card or a rewards credit card so that you can make your card work for you instead of against you.
Be sure to pay off your credit card balance in full every month, use up all of your gift card balances instead of letting them sit unused in perpetuity, and then find the best credit card for your spending habits utilizing our super easy to use credit card finder today!
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