The Federal Reserve recently set new rules regarding gift cards that will greatly limit the amount of fees consumers will be subjected to. In addition to limiting the fees gift card issuers will be able to charge consumers, the rules also require issuers to provide "clear and conspicuous disclosure" of terms and conditions relating to usage of the cards. Gift card issuers will also be prevented from charging any fees until a gift card has gone unused for a year or more, with fees being limited to one per month at that point. Lastly, the new rules will extend the expiration date of gift cards to either five years after the date of purchase, or five years after funds are loaded to the card, depending on card type.

Many consumers have complained for years about the amount of fees charged for gift cards, and the lack of full disclosure of what these fees are upon purchase. These rule changes are a good step toward eliminating one area in which consumers have been abused by companies seeking to maximize profits at the expense of customers. These rules, which the Fed was tasked with enacting under the Credit Card Accountability and Responsibility Act of 2009, decrease the ability of card issuers to charge hidden fees which oftentimes have no legitimate explanation.


These new gift card rules are only the tip of the iceberg of what still needs to be done to protect consumers from being charged frivolous and excessive fees. Although a nuisance, gift card fees are small potatoes compared to the fees that credit card companies are allowed to get away with charging. This is particularly the case for credit cards targeted at individuals with bad credit, or "sub prime cards". Although President Obama included many provisions in the Credit CARD Act of 2009 that are beneficial to consumers, there are still areas of concern, particularly relating to those areas of the credit and loan industry that target mostly underprivileged people, and those with less than perfect credit. Although credit card companies should be allowed to do business and make a profit, as well as protect themselves when issuing credit to people with credit histories that are less than perfect, there should be some limit to the amount of interest card issuers can charge to any consumer. In addition, although many states have already passed legislation either banning payday loans or limiting the fees that may be charged, in many other places payday loan companies are still allowed to do business with few if any restrictions.

Ultimately, whether using gift cards, credit cards, "renting to own", or taking out payday loans, it is up to consumers to keep themselves informed and aware of all the potential fees they may be charged. Although the new rules being enacted are beneficial, there are still many ways in which people can get themselves in serious financial trouble if they don't make educated decisions about how to manage their money and credit. No amount of legislation can completely negate the need to be an informed consumer.