The credit card giant says it will no longer charge a monthly fee for nothing. Up until now, AmEx charged its gift card holders a fee of $2 a month if the card was not used up within 12 months of purchase. So on month 13, a $25 card was worth $23; month 14 the card was worth $22; month 15, $19. etc.
Many media outlets are applauding this move apparently unaware that this 'generosity' is demanded of most gift card issuers.
For retailers in California, and many other states, it’s illegal to charge a monthly fee. Banks can get away with this because they are regulated by the federal government. With this move, American Express is now charging what Macy's, Sears or Starbucks have been charging: Nothing. Still, AmEx is now charging less than many other federally regulated banks.
So when buying gift cards, remember banks can assess fees that would be illegal if they were retailers, so read the fine print.
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