Who Get's My Money After Gift Card Expiration?

Did you get a gift card for Christmas? Since it was given to you, you probably think the money should be spent by you. However, if you wait too long to spend that gift card, it could end up in the state's unclaimed-property account.

Why? Well, even though you might not think you've abandoned your gift card, if you don't use it after a certain amount of years it might be subject to laws that allow the money left on that card to revert, or escheat, to your state's piggy bank.

So, when does the gift card money become the state's money? That depends on your state's escheat laws.
There are basically three models of escheat laws.

1. No expiration or escheat model.

This is a very consumer-friendly model used in several states including California, Washington and Massachusetts. This model never gives up the money to the state. The gift card is good from now until eternity. In this model, there is a reserve fund specifically for redemptions set up by the retailer. By setting up this reserve fund, the retailer recognizes that the consumer can eventually redeem the gift card for merchandise. Retailers in these states are not required to have the money escheat to the state.

2. 60/40 model.

This is a more traditional model stating that gift certificates can come with expiration dates and when they do expire (usually between three and five years) retailers are responsible for having 60 percent of the value of the card escheat to the state. The retailers are allowed to keep the other 40 percent. The state acknowledges that retailers have costs that come with gift cards and allows them to keep a portion of the leftover money. Indiana and Iowa use this law.

3. No gift-card expiration dates, escheat laws apply.

This model is somewhat confusing since the states involved, such as Connecticut, have eliminated expiration dates on gift card and certificates. However, even though consumers will not find expiration dates on their gift cards, they are expected to use their gift cards within three years. Otherwise the state views the gift card as abandoned and the money escheats to the state. However, if a customer comes in after three years and obtains merchandise from the store using their unexpired gift card, the retailers can apply to get the money back from the state.

According to George Delta, counsel to the Incentive Marketing Association, a trade organization of businesses in the incentive industry, "States require businesses to give them some type of periodic report of the amount of unclaimed property they are holding. This allows the state to monitor this potential source of income."

Dan Horne, professor of marketing at Providence College, says consumers ultimately benefit from state escheat laws because the unused money that is not claimed goes into the state Treasury.

With 50 states, there is no easy, uniform answer to questions of escheat. If you are wondering about how your state handles gift cards, the Incentive Gift Card Council offers a link to check your state's escheat laws.

By Kristin Arnold

Tips For Responsible Credit Card Use

These days it seems the use of credit is running rampant. So many people are purchasing things they don't have the money for. This is quickly ensuring a generation of people who will spend a majority of what they earn just to may down their debt, instead of using their hard-earned money for other things.

Credit is an important part of buying the necessities in life, such as a home, or a vehicle. The more credit you're able the build, the better, so a credit card is an easy avenue to get there. Credit used irresponsibly, however, can do serious harm to your credit status. Therefore, a serious look at responsible credit card use is important.

The first thing to remember when using your new credit card is to go by a budget. Decide just how much you can comfortably afford to absorb and try not to go over this total. Just because you have a limit of $5000, doesn't mean you should max this number out each month. It is ultimately your money that you are spending, so keep this in mind when developing a budget.
Pay the full balance on your card as often as possible. If you are sticking to your monthly budget, this shouldn't be a problem. Keeping your balance paid in full will ultimately boost your credit rating much quicker, as creditors will see you as a much lower credit risk. Paying in full will also help you to avoid costly interest charges. Paying just a minimum monthly payment will ultimately cost you many times over in interest charges, so it is important to pay your balance in full to avoid those extra charges.

Pay close attention to your statements. Credit companies can normally change interest rates with advance notice. Read your statements thoroughly to ensure you're well aware of any changes in your account and act accordingly.

Keep track of the due date for payment and be sure never to be late in making your payment. This is where credit companies earn a majority of their profits. They will charge a late fee, even for being one day late with your payment. Always try to get your payment in well in advance to avoid a late fee.

Save all of your transaction receipts. Hold onto your receipts and check them against your monthly statement to ensure there are no mistakes. This will ensure you have physical proof in case the listing in your statement does not match up with your receipt. The last thing you want is to pay extra for something because you misplaced your receipt.

Never give your PIN number to anyone. There is no valid reason for a bank, credit card company, or any merchant to request your PIN number. Disclosure of your PIN number can lead to credit card fraud and the possibility of you being stuck with charges you never made.

When paying with your card, keep a keen eye on the merchant accepting it. Be on the look out for any suspicious activity. Card skimming is becoming a highly lucrative form of fraud and could potentially cost you a lot of money if you are hit. If you suspect you have been the victim of skimming, or any other form of credit card fraud, contact your credit card company immediately to have it deactivated.

Following the tips outlined above should help you make responsible choices when using your credit card and will hopefully help you avoid pitfalls many do not. A credit card is a very convenient tool when used responsibly.


What Is Bank Secured Credit Cards

Even though there are many types of credit cards out there for consumers, there are few for those with bad credit. Those who are looking to repair their credit have a few options available, one of which is the bank secured credit card. This credit card can help you to repair your credit, as it works in conjunction with your savings or checking account.

Bank secured credit cards look and work just like traditional credit cards, although they use your bank account as collateral. Anytime you arent able to pay your credit card bill at the due date, the bank will take the money out of your account. This way, there is always money there for the bank, in the event that you are unable to make your payment.

credit card reportBank secured credit cards are also ideal for those who have a bankruptcy or simply dont qualify for a line of credit due to bad credit or no credit history. These credit cards show your bank that you are able to pay your monthly dues, and that you are taking the necessary steps in rebuilding or building your credit. Over time, if you remain responsible and pay your bill on time, your bank may give you an unsecured line of credit - known as a standard credit card with no collateral.
Due to the fact that bank secured credit cards only allow you to spend what have in your account, you dont need to worry about debt. When you cant make a payment, the bank simply takes the money out of your account. Although this is a great back up plan, you should always pay your bill and never let this happen.

Just like other credit cards, bank secured credit cards do have disadvantages that can hit you like a ton of bricks should you use the card irresponsibly. Anytime you dont pay your bill on time, the bank can hit you with high interest charges and late charges. These charges and fees can get higher and higher if you dont start paying your bill, which can eventually cause you to drain your account that you set aside. If you pay your bill on time though, you wont have to worry about being hit with these types of charges.

For those who have bad credit or need to start building credit, a bank secured credit card is a great place to start. These cards can lead you to an unsecured credit card, providing you pay your bill on time. Almost all banks offer these credit cards, all you have to do is ask. Once you have kept your credit card in good standing for a period of time - youll have the satisfaction in knowing that you are taking the right steps in rebuilding your credit.