Important information about gift cards this holiday season

Gift card giving and receiving is likely to leave few American consumers untouched this holiday season, as the National Retail Federation estimated that a full $25 billion of spending will be generated through gift cards this holiday season.

There’s good news regarding this gift-giving trend, as new federal regulations have put restrictions on the terms such cards can have. The Credit CARD Act was put in place to protect consumers from misleading practices by credit cards, which may have posed significant problems for consumers facing financial difficulties or trying to improve their bad credit history.

Due to the act, gift cards can no longer expire for at least five years, according to Consumer Reports, cannot have a dormancy fee for 12 months of inactivity and cannot be charged more than one fee a month for 12 months of inactivity.

Despite such recently-introduced protections, gift cards may still need to be reconsidered. According to Consumer Reports’ data, nearly 25 percent of adults surveyed in 2009 were still holding onto their old gift cards without using them. To avoid such waste, the news source recommends against giving gift cards.