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Store-branded gift cards found to have fewer fees

Fewer fees are charged by store-branded gift cards than all-purpose gift cards issued by banks and credit companies, a newly released report has revealed.

The Bankrate.com report showed that, of the 55 widely-held store-branded gift cards examined in its 2012 Gift Card Survey, only nine percent had purchase fees and only two percent had dormancy or maintenance fees.

Eight prominent gift cards offered by banks and credit card companies were surveyed. All were found to charge a purchasing fee of between $2.95 and $6.95. Seventy-five percent of the cards survey charged a dormancy or maintenance fee of up to $3 per month if the card was not used for 12 months or more.

“The key takeaway for consumers is that they’re going to get the most value from store-branded gift cards,” Janna Herron, a credit card analyst at Bankrate.com, said. “The benefit of general-purpose cards offered by banks and credit card companies is that they can be used anywhere, but because of the fees, you would be better off giving cash.”

The 2012 Gift Card Survey also found that credit companies are more likely to charge fees because of their need to generate revenue from the gift card business. Retailers, however, are not as dependent on gift card fees because the money on the cards will be put toward goods and services at their stores.

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