Finance

Recently, Citibank announced that its dividend reward credit cards would stop paying 5% back on everyday purchases made at supermarkets, drugstores and gas stations as of mid-October, and instead only rebate 2%.

Rebate card junkies might then have gotten their hopes up after seeing this American Express Blue Cash Card application promising “up to 5% cash back.”

Not so fast.

*MOUSE PRINT:

Translation: You will only earn 5% back on purchases at supermarkets, drugstores, and gas stations (“everyday purchases”) after you have first put $6500 of purchases on the card each year, and the 5% rebate will only apply to subsequent “everyday” purchases.

Gift cards are all the rage, and Wells Fargo says they have sold a million of them in just over a year.

Unlike store specific cards, the Wells Fargo card is a prepaid Visa card good anywhere Visa is accepted.

They call it “the perfect gift,” and tout its benefits on their website.

*MOUSE PRINT: What they don’t highlight are the many possible fees and quirks of the card. Those details are buried in their FAQs and separate 4000-word terms and conditions statement.

Information about fees is scattered over both documents, and they include:

• Purchase fee: $2.50
• Online shipping/handling: $2.50
• Reissue fee (for balances remaining after three years): $7.50
• Manual check issuance fee (to get remaining balance on card): $15.00
• Monthly maintenance fee after one year: $2.50
• Lost card replacement: $7.50
• Foreign currency conversion fee: 3%

Card nuances:

• Split tenders: if the item you are purchasing costs more than the amount you have left on the card, you may or may not be able to use the gift card in addition to some other form of payment to cover the balance.

• Using the card at gas stations can pose a problem:

If you use your Card to purchase gasoline, we recommend that you pay inside the station, not at the pump. If you were to pay at the pump, the electronic terminal at the pump may be programmed to confirm that you have sufficient available balance on your Card to pay for an average purchase of gas. Before you are permitted to pump gas, many pumps seek an authorization for $75 and this amount could increase from time to time (“Preauthorization Request”). If you have an insufficient available balance on your Card to cover the Preauthorization Request, your attempt to use your Card at the pump may be declined. If you have a sufficient available balance on your Card to cover the Preauthorization Request, you will be permitted to continue your transaction at the pump. However, if the dollar amount of your actual gasoline purchase is less than the amount of the Preauthorization Request that we approved, a “hold” on your available balance may automatically result equal to the difference between the two amounts. Once the merchant sends us the final amount of your actual gasoline purchase, we will remove the “hold” on your available balance for any additional amount exceeding this final amount. This may take 3 to 7 days and during this period you will not be able to use any balance subject to this “hold.” TO AVOID A DECLINE OF, OR A HOLD ON, YOUR AVAILABLE BALANCE ON YOUR CARD, WE RECOMMEND THAT YOU PREPAY FOR YOUR GASOLINE INSIDE THE STATION.

• Restaurants and travel businesses (hotels, car rentals) may authorize more than the actual purchase price of services, causing your card to be rejected if insufficient funds are on the card.

Many of these fees and inconveniences are inherent problems of many brands of gift cards or prepaid debit cards. And we probably should be thankful that Wells Fargo does not charge some fees that others do, such as for calls to customer service. The bottomline is that you might never know of these fees and inconveniences if you didn’t take the time to read all the mouse print.