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Guilherme Mazui

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What is the Difference Between Gift Card and Credit Card?

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The main difference between a gift card and a credit card lies in their purpose and how they are used. Here are the key differences:

  1. Purpose: Gift cards are intended as a one-time spending card, often given as a present to someone else. They can be used at a specific store or a set of stores, but not for cash withdrawals. Credit cards, on the other hand, are used to make purchases on credit, and the balance needs to be paid later.
  2. Usage: Gift cards can only be used to buy items at the designated store or stores, and they do not allow cash withdrawals. Credit cards can be used for various purposes, including making purchases, paying bills, and withdrawing cash from ATMs.
  3. Reloadable vs. Non-reloadable: Gift cards are typically non-reloadable, meaning once the balance is spent, the card can no longer be used. Credit cards are reloadable, as they allow you to make payments and borrow money up to a certain limit, which can be used again once the balance is paid off.
  4. Fees: Gift cards may have activation, maintenance, or inactivity fees, while credit cards may have activation, monthly maintenance, transaction fees, and interest charges if the balance is not paid in full by the due date.
  5. Expiration: Gift cards often have expiration dates, after which they become unusable. Credit cards do not have expiration dates, as they are meant to be used for an extended period.

In summary, gift cards are one-time spending cards with limited usage, while credit cards allow for multiple uses and can be used as a revolving line of credit with proper payments made on time.

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  • What is the Difference Between Gift Card and Credit Card?
  • Comparative Table: Gift Card vs Credit Card

    • Comparative Table: Gift Card vs Credit Card

    Here is a table comparing the differences between gift cards and credit cards:

    Feature Gift Card Credit Card
    Definition A gift card is a stored value card loaded with funds for future discretionary use. It contains a specific amount of money, and once this sum is spent, the card can no longer be used. A credit card is a plastic card issued by a bank or financial institution that allows the cardholder to borrow money to make purchases. The cardholder is required to repay the borrowed amount later, usually with interest.
    Use Gift cards are primarily used as a form of payment at specific merchants or retailers, where they can only be used to purchase goods or services from that particular store. Credit cards can be used at any merchant that accepts the card's payment network (e.g., Visa, MasterCard, American Express).
    Balance The balance on a gift card is pre-loaded and fixed, meaning that once the funds are depleted, the card cannot be used again. Credit cards have a revolving balance, allowing cardholders to spend up to a certain limit, repay the balance, and spend again.
    Expiration Gift cards often have an expiration date, after which they become unusable. Credit cards do not have an expiration date, as they are a revolving line of credit.
    Fees Some gift cards may have fees for specific events, such as inactivity or cash withdrawal. Credit cards may have various fees, such as annual fees, late payment fees, and foreign transaction fees.
    Loading Gift cards are loaded with a set amount of money, and no additional funds can be added. Credit cards allow cardholders to borrow money up to a certain limit, which can be paid off and reused.

    Keep in mind that some gift cards, known as open-loop cards, can be used anywhere the regular credit card is accepted, which can lead to confusion with prepaid debit cards.

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    Guilherme Mazui

    Guilherme Mazui is graduated in journalism from the Federal University of Minas Gerais (UFMG) and a master's degree in Communication from the University of São Paulo (USP). In addition, he has experience in advertising writing and has worked as a content editor in several companies.