Yes. You can buy prepaid Visa or Mastercard gift cards at many stores and online, usually with an activation fee.
Types
- Open-loop gift cards (Visa, Mastercard, American Express) work wherever those cards are accepted.
- Closed-loop cards work at a specific store.
Where
Grocery stores, pharmacies, convenience stores, big box stores and online.
Fees
Activation fees are typically $3.95 to $6.95 for a $25 to $500 card. Some cards charge monthly fees after 6 to 12 months.
Limits
Some stores cap purchases (about $500 to $2,000 per transaction).
ID
Required for large amounts.
Safety
Check the packaging for tampering. Scams often demand payment with gift cards. The FTC says anyone who asks you to pay with gift cards is a scammer.
Use
Register the card, if possible.
Expiration
Federal law requires at least 5 years.
Types of gift cards
Credit card gift cards are prepaid cards issued under the Visa, Mastercard, American Express or Discover brands. They work anywhere those networks are accepted, unlike store gift cards, which work only at one retailer or mall. They are not credit cards: there is no credit line, no interest and no effect on your credit score. Load amounts are usually from $25 to $500.
Where to buy
They are sold at grocery stores, drugstores, big box stores, post offices and online, including Vanilla, Visa and Amex gift card programs. Buy only from the display in a store or the issuer’s website. Check that the packaging is intact and the PIN area is not scratched or exposed.
Fees
Federal rules under the Credit CARD Act require that gift cards cannot expire within 5 years of purchase, and fees for inactivity cannot be charged in the first 12 months. Typical costs are:
- Purchase fee: about $3.95 to $6.95 for a $25 to $100 card.
- Inactivity fee after 12 months of no use, of around $2.50 a month on some cards.
- Fees for adding funds or for a replacement.
Read the terms on the package before buying.
Limits
Most cards hold up to $500 or $1,000. The purchase limit per transaction is often $500 to $2,000 online. Cards labeled “reloadable” can be topped up, but gift cards typically cannot. Some stores limit the number of cards per customer, to reduce fraud.
ID
You usually do not need ID to buy a general-purpose gift card, although stores may ask for it for larger or multiple purchases. Cards cannot be used at ATMs for cash in most cases. Many are also not accepted for gas pumps or hotels, because they cannot hold a pre-authorization.
Safety
- Never pay a stranger, an official or a “debt collector” with gift cards. The FTC reports consumers lost over $200 million to gift card scams in a year. Anyone demanding payment in gift cards is a scammer.
- Check the card balance after purchase and register it to protect against loss.
- Keep the receipt.
Use
Treat it like cash. Register the card online, check that the balance covers taxes, and for online use enter a billing zip code if needed. When a purchase exceeds the balance, tell the cashier the exact amount on the card, so the rest can be paid by another method.
Expiration
The funds are generally good for at least 5 years, but the card itself may expire sooner. The issuer must give you a replacement card with the remaining balance.
Rules for open loop and closed loop cards
A credit card gift card, such as a Visa or Mastercard branded prepaid gift card, can be bought at grocery stores, pharmacies and online, and works anywhere the network is accepted. An activation or purchase fee of about 3.95 to 6.95 USD per card is common, and amounts typically range from 25 to 500 USD. Under the federal CARD Act, gift cards cannot expire for at least 5 years from issuance or last load, and inactivity fees are limited. Check the terms for monthly maintenance fees after 12 months on some open loop cards. Keep the receipt, register the card if possible, and report a lost card promptly, since many are not replaceable. Gift card payment is a common scam request, and the FTC says that anyone demanding payment by gift card is a scammer.
Based on data from the FTC and the Consumer Financial Protection Bureau
