Gift Cards Make the Perfect Graduation Gift

Stuck on what to get that teenager you see only twice a year for graduation? A gift card is an easy way to make sure grads get exactly what they want.

Still, gift card givers and recipients should ask themselves five important questions:

1. Where can the gift card be used?

You can use store-specific cards only at a particular store or through the store's Web site. You usually may use general-purpose cards, like those from Visa, MasterCard, or American Express, where those cards are accepted. These cards offer more flexibility but are laced with fees.

2. Does the card expire?

Some cards expire after a certain date and wipe out the remaining balance. Other cards are cancelled on the expiration date and the cardholder receives a new card with the old card's remaining balance. Use your card before this happens, though, because this service can cost anywhere from $5.95 to $10.

3. Are there maintenance fees?

See if the card charges a fee if you carry a balance after a certain date.

4. What happens if the card gets lost or stolen?

Some stores will issue a new card, others won't. Check the store's policy before you make a purchase, and keep those receipts just in case. General-purpose gift cards may charge you a replacement fee of $5.95 to $10.

5. Can I get cash with my gift card?

Most stores won't let you trade your card for cash. If they do, you'll probably face fees that slash the value of the card. Certain general-purpose cards allow you to get cash from ATMs (automated teller machines), but again, those fees are high.

© 2007 Credit Union National Association Inc.