After months of deliberating, the Federal Reserve has finalized a new set of rules to make gift cards less of a curse for consumers.
Perhaps the most significant change under the new rules is that consumers will have at least five years to use gift cards before they expire. Gift cards may still carry service or inactivity fees, but according to the Associated Press, now this can only happen “if the consumer hasn't used the card for at least a year, if the consumer is given clear disclosures about them and no more than one fee is charged a month.” This way, consumers won’t be unduly penalized for getting holiday gift cards only to forget about them once the holiday season passes.
"These new rules will curb the abusive fees and early expiration dates that can drain gift cards of their value before they are ever even used," Sen. Charles Schumer (D-N.Y.) said in a press release.
MarketWatch reports that the rules will apply to gift cards from retailers and branded cards like American Express. As they point out, many states already have laws that regulate gift cards to some extent, but most do not touch on these branded cards.
As of now, the new rules are scheduled to take effect Aug. 22, but some lawmakers are trying to push that date up sooner.
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