The Credit Card Act and Rebate Cards

January 21st, 2010 by Reed Allmand

Years ago rebates were offered as checks; but now most consumers receive rebates via cards that can be burdened with a variety of fees and can be difficult to redeem.  And while the Credit Card Act covers both gift cards and prepaid cards, rebate cards will not be covered by the new law.

The Credit Card Act, which was passed last spring, established new standards not only for credit cards but also for gift cards and prepaid cards. Beginning in August, the law requires that any expiration date on those cards be at least five years out. It also bans penalty fees for not using a card within the first year, among other restrictions.

But the legislation makes an exception for gift and prepaid cards offered as part of a promotional program, such as rebates. Expiration dates on those cards typically range from two weeks to three months… In addition, the programs are often designed to discourage consumers from redeeming the offer… about 20 percent of $4 billion in annual rebate offers are left on the table.

Another thing consumers need to watch out for is monthly fees on rebate cards. Under the Credit Card Act, monthly fees are forbidden for gift cards and prepaid cards; but rebate cards are excluded from this rule.  Also you could find that your rebate card has other restrictions such as a 2 week window in which to use the rebate card and/or a restriction on what you can buy with the card.  Remember, under the Credit Card Act a rebate card is treated differently from a gift card or prepaid card. Please consider this before you sign up for rebate programs.