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All-purpose gift cards are usually the costliest, Bankrate finds

Updated: December 14, 2012 6:20AM

If you plan on shopping for gift cards this holiday season, you’ll find store-branded cards are a better deal because they charge fewer fees than the all-purpose cards issued by banks and credit card companies, research from consumer website shows.

Of 55 store-branded gift cards surveyed, only five charged purchase fees, its survey revealed.

But gift cards issued by banks and credit card companies with a Visa, Master Card, American Express or Discover logo had purchase fees ranging from $2.95 to $6.95, according to the survey. The fee depended on the issuer and whether the card was bought online or at a bank branch. Six of the cards charged a dormancy or maintenance fee up to $3 a month if the card went unused for 12 months. The American Express gift card and the Fifth Third Bank MasterCard gift card were the only exceptions, according to the survey. looked at eight of the most widely used all-purpose cards including American Express, BMO Harris Bank MasterCard, Discover, Fifth Third Bank MasterCard, KeyBank MasterCard, Chase Visa, U.S. Bank Visa and Wells Fargo Visa.

Branded gift cards surveyed included Macy’s, Bloomingdales, Staples, Toys R Us, Bed Bath & Beyond, Kohl’s, Red Lobster, Olive Garden and Chevron Texaco among others.

The survey found out of the 55 branded cards examined, Staples charges $1.99 for a secure tracking fee on its gift cards, and Toys R Us charges a $1.95 purchase fee. Shell, Chevron Texaco and Exxon all charged a processing fee or handling fee for gift cards bought online, although there were no fees for cards purchased at gasoline stations, said.

The benefit of general-purpose cards offered by banks and credit card companies is, “it gives your gift recipient plenty of flexibility, so if you’re not sure exactly where they like to shop, a general purpose gift card allows them to go anywhere pretty much,” said credit card analyst Janna Herron.

“If you know where your recipient likes to shop, a store banded gift card is a better value for you,” due to fewer fees. “You don’t have to worry about your recipient dealing with any inactivity fees,” she added. “Only one store branded gift card had an inactivity fee, whereas six of the general purpose cards had inactivity fees after 12 months.”

Federal rules require gift cards to stay open for at least five years, and 95 percent of such cards don’t have an expiration date,, notes. But it advises consumers before buying gift cards to read the fine print and be aware that cards vary widely in amount of fees they charge, whether they can be replaced if stolen and whether they’re reloadable.

Herron advises last minute gift card shoppers to consider e-cards. Half of the cards surveyed can be bought and sent via email.

She added for techies, Starbucks is among a few retailers that offer mobile gift cards that can be sent to smart phones.

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