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The Fed issues new gift card rules

Posted by Jill Boynton  August 10, 2010 10:06 AM

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On August 22nd, the Credit Card Accountability, Responsibility and Disclosure Act of 2009 will take effect. Part of the Act imposes new rules on gift card issuers. As of August 22nd gift cards must be good for at least 5 years. In addition the ability to impose fees and charges on gift cards is much restricted. An inactivity fee can only be charged if the card is dormant for 1 year and such fee – along with any other fees and charges – is disclosed to the card buyer at the time of purchase. In addition no more than one fee can be charged in any month. Also you can’t get hit with a fee for replacing an expired card that still has money on it. There are some exemptions, including prepaid phone cards and some reloadable cards (for a full explanation of the Act click here.)

Existing gift cards that show an expiration date of less than 5 years can be sold but the dormancy and inactivity rules as well as the service fee restrictions still apply.

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ABOUT MANAGING YOUR MONEY
Local finance professionals share insights and advice on issues such as budgeting, managing debt, and retirement planning.

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D. Abraham Ringer is a CERTIFIED FINANCIAL PLANNER practitioner and a Financial Adviser with Morgan Stanley Global Wealth Management in Boston. He is registered in MA, NH, NY and several other states to which his articles are directed. For more information please visit www.morganstanleyfa.com/ringer
Financial Planning Association™ of Massachusetts has 900 members who specialize in the financial planning process. Many of its members engage in philanthropic pro bono work in their communities, recommend legislation, elevate public awareness, promote financial literacy, and advocate for sound economic and tax policies.
Odysseas Papadimitriou is the founder of CardHub.com, a credit card and gift card marketplace, and WalletHub.com, a personal finance site. He has more than 13 years of experience in the personal finance industry, and previously served as senior director at Capital One.

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