Best gift cards to buy for Christmas

Best gift cards to buy for Christmas

RateCity top picks for gift cards

Company Expiry date Perks
Bunnings Unlimited Will give change when card goes below $9.95
Apple Unlimited
Netflix Unlimited
IKEA 3 years Can be used in 23 countries
JB Hi-Fi Unlimited Will honour expired gift cards
The Good Guys Unlimited Will honour expired gift cards

Beware the fine print

Company Expiry date Terms & conditions
Youfoodz 6 months Short expiry period
Ella Bache 6 months Short expiry period
Endota Spa 12 months Charges you $10 delivery fee for the card
Westfield 12 months Some retailers may choose not to accept the gift card
Sportsgirl 12 months 50% of value will be deducted for cancellations within 24 hours notice
Bing Lee Unlimited The gift card must be used in one transaction
Australia Post Visa Card 24 months $5.95 purchase fee (up to 10% of card value). $4 fee for balance enquiry by phone.
Myer 24 months Charges you $4.95 delivery fee for the card

Getting the most out of your gift card

  • Check expiry dates carefully. If they’re not clearly stated, contact the retailer, or keep a copy of the purchase receipt.
  • Check the fine print for any fees for posting or activating the card.
  • Treat your gift card like cash – retailers won’t honour lost or stolen cards.
  • If the retailer goes bankrupt, their gift cards may become unusable e.g. Dick Smith in 2016.
  • Spend the card’s full amount before the expiry date. Some retailers will transfer any remaining leftover balance to a new gift card.

Gift cards are one of the most popular presents to be found under the Christmas tree with around 34 million cards sold each year. However, despite the popularity, RateCity warns gift cards come with a number of hidden traps.

RateCity research has revealed the most common expiry date for a gift card is only 12 months, with some cards offering as little as three months to purchase your present.

Apple and Bunnings gift cards are some of the best on the market with no expiry date attached to the use of the card.  Clothing retailers such as Cue and H&M are also leading the way offering shoppers 36 months to purchase a present before the gift card officially expires.

RateCity money editor Sally Tindall said even though gift cards are one of the most convenient presents to buy, shoppers should always read the fine print.

“Gift cards are meant to operate just like cash, but in reality they come with pages of terms and conditions that often work in the retailers’ favour.

“Short expiry dates are the biggest offender, but shoppers also get caught out with postage and activation fees and conditions on where and how the money is spent.

“The other way shoppers end up forfeiting their cash, is by only spending part of the value of the gift card. Often the balance left behind is never spent, and when the card expires, retailers keep the difference.

Christmas online shopping top view. Female buyer with laptop, copy space on screen. Woman buys presents in internet with gold credit card, drinks coffee among gift boxes. Winter holidays sales

“While a couple of dollars here and there doesn’t sound like much, collectively, Australians spent $2.5 billion every year on gift cards. The Commonwealth Consumers Affairs Advisory Council estimated that up to 8 per cent of cards are never used, which equates to up to $200 million in ‘e-change’ that is lost by Australian consumers each year.

“It is also concerning some retailers are charging up to $10 to purchase a gift card and send it in the mail.  Not all retailers do this, so shop around, and make sure you are getting a good deal.

“We were pleased to hear the NSW government has finally stepped in, forcing retailers to put a three-year minimum on gift card expiry dates. Although, there is no firm date for the new law to be implemented, this is certainly a move in the right direction.

Now the pressure is on other states to follow suit.

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Learn more about credit cards

What's the best credit card for rewards?

There is no one-size-fits-all best rewards credit card. It's best you research what type of rewards program you'd like, as well as the fees, interest rate and conditions associated with those types of cards before making a choice. 

Rewards credit cards can also come with high annual fees that may end up nullifying the rewards, so think how often you use the card to decide whether the benefits outweigh the extra cost for you. A card with a lower annual fee might require a lot of spending to get any useful rewards, while another card with a higher annual fee might need fewer purchases to get a reward. 

How do you cancel a credit card?

It’s important to cancel your old cards to avoid any additional fees. Unless you’re doing a balance transfer, you’ll need to pay the outstanding balance before you cancel your credit card. If you’ve opted for a card with reward points, make sure you redeem or transfer the points before you close your account. To avoid any bounced payments and save yourself an admin headache, redirect all your direct debits to a new card or account. Once you’ve done all the preparation, call your bank or credit card provider to get the cancellation underway. Once you receive a confirmation letter, destroy your card and make sure the numbers aren’t legible.

What should you do when you lose your credit card?

Losing your credit card is a serious situation, and could land you in financial trouble. Here is a simple guide detailing what to do when you lose your credit card.

Lock you card – Contact your provider and inform them about your lost credit card. From here lock, block or cancel your card.

Keep track of transactions – Look out for unauthorised credit card transactions. Most banks protect against fraudulent transactions.

Address recurring charges – If your card is linked to recurring charges (gym membership, rent, utilities), contact those businesses.

Check credit rate – To ensure you’re not the victim of identity theft, check your credit rating a month or two after you lose your credit card.

How to get cash with just a credit card number

Banks and merchants usually will not allow you to access cash without a physical card, because doing so would open up opportunities for fraudulent activities. Even most non-cash credit card transactions (such as shopping online) require you to know the expiry date and CVV on your credit card in addition to the card number.

However, some banks offer cardless cash for transaction accounts. Using a secure app installed on your mobile phone, you can log onto an ATM and withdraw the money you need. This could be a practical and secure solution if you don’t have a card and need cash.

Can a pensioner get a credit card?

It is possible to get a credit card as a pensioner. There are some factors to keep in mind, including:

  • Annual income. Look for credit cards with minimum annual income requirements you can meet. 
  • Annual fees. If high fees are a concern for you, opt for a card with a low or $0 annual fee. 
  • Interest rate. Make sure you won’t have any nasty surprises on your credit card bill. Compare cards with a low interest rates to minimise risk.

Should I get a credit card?

Once you've compared credit card interest rates and deals and found the right card for you, the actual process of getting a credit card is quite straightforward. You can apply for a credit card online, over the phone or in person at a bank branch. 

How do you use credit cards?

A credit card can be an easy way to make purchases online, in person or over the phone. When used properly, a credit card can even help you manage your cash flow. But before applying for a credit card, it’s good to know how they work. A credit card is essentially a personal line of credit which lets you buy things and pay for them later. As a card holder, you’ll be given a credit limit and (potentially) charged interest on the money the bank lends you. At the end of each billing period, the bank will send you a statement which shows your outstanding balance and the minimum amount you need to pay back. If you don’t pay back the full balance amount, the bank will begin charging you interest.

What is a balance transfer credit card?

A balance transfer credit card lets you transfer your debt balance from one credit card to another. A balance transfer credit card generally has a 0 per cent interest rate for a set period of time. When you roll your debt balance over to a new credit card, you’ll be able to take advantage of the interest-free period to pay your credit card debt off faster without accruing additional interest charges. If your application is approved, the provider will pay out your old credit card and transfer your debt balance over to the new card. 

What is CVV on a credit card?

CVV stands for ‘card verification value’, and is also sometimes referred to as a CVC or card verification code.

A CVV code is usually needed when the card is used online or over the phone as an anti-fraud measure. Without the cardholder being physically present to sign or verify the purchase, the CVV provides an extra layer of protection. 

If you’re using Mastercard or Visa, the CVV is the three digits located on the back of the card. If you’re using an American Express, the CVV is usually four digits and is on the front of the card.

Which credit card has the highest annual percentage rate?

The credit card market changes all the time, so the credit card with the highest annual percentage rate is also liable to change.

Keep in mind that credit card interest rates are expressed as a yearly rate, or annual percentage rate (APR). A low APR is generally good but also consider:

  • There can be different APR's for each feature of the card (e.g. purchases may have an APR of 14 per cent, while cash advances on same card could have an APR of 17 per cent.
  • Credit cards with a variable rate can change throughout the year, affecting your APR, so check the full details.
  • If you pay your balance in full every month, having the lowest APR is not as important as the other fees associated with the card. However, if you carry a balance from month to month, then you want the lowest APR possible.

How many numbers are on a credit card?

The numbers on your credit card actually follow a universal standard which is used to identify specific functions. Each credit card has a different amount of numbers. Visa and Mastercard have 16, American Express has 15 and Diner’s Club has 14. 

The first number on a credit card always identifies what type of credit card it is. Visa cards start with a 4, whereas Mastercard starts with a 5 and American Express with a 3. The remainder of the digits represent the account number, including the last number which is used to verify that your credit card is actually valid. 

Credit cards also have additional verification numbers, which are mainly used when the card isn’t present for phone and online purchases. These are the three-digit numbers on the back of Visa and MasterCard or the four-digit numbers on the front of an American Express card.

How to get a credit card for the first time

A credit card can be a useful financial tool, provided you understand the risks and can meet repayment obligations.

If you’re a credit card first-timer, review your options. Think about what kind of credit card would suit your lifestyle, and compare providers by fees, perks and repayments.

Once you’ve selected a card, it’s time to apply. Credit card applications can generally be completed in store, online or over the phone.

When you apply for a credit card for the first time, you must meet age, residency and income requirements. As proof, you must also provide documentation such as bank account statements.

How do you use a credit card?

Credit cards are a quick and convenient way to pay for items in store, online or over the phone. You can use a credit card as a cashless way to pay for goods or services, both locally and overseas. You can also use a credit card to make a cash advance, which gives you the flexibility to withdraw cash from your credit card account. Because a credit card uses the bank’s funds instead of your own, you will be charged interest on the money you spend – unless you pay off the entire debt within the interest-free period. If you pay the minimum monthly repayment, you will be charged interest. There are many different credit card options on the market, all offering different interest rates and reward options.

Where can I get a credit card?

Looking to get your first credit card? You might be confused as to exactly where to go to apply for one. Here’s where to go when you are ready to put in that application.

The bank: Your bank is a great place to start, provided that you have a good banking history. Since you already have a financial history, you have more chance of your application being approved.

Credit card provider: Another option is to apply for a credit card directly from the issuer, such as Visa, Mastercard or Amex. This will most likely be an online application, so do your research and apply for a suitable card for your circumstances.

Major retailers: Coles, Woolworths, Myer and David Jones all have credit cards available. But watch out for the interest rate and annual fees – these cards are designed to help you spend more in store.