Gift cards vs Debit cards: Similarities and differences

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Gift cards and regular debit cards are similar and different in quite a lot of ways. They both share a few characteristics like appearance, functions, and method of use. Likewise, they differ in features like flexibility, the process of acquisition, location of utilization, acceptability reach, and some other areas of functionality.

What is a Gift card?

Gift cards are electronic cards used to make payments for goods and services as specified by the issuer. They are issued by specific companies, retail stores, and dealer outlets to aid the easy purchase of their products. They could come in physical or virtual cards.

Physical gift cards are the form of gift cards that are made with plastic cards, capable of validation and payment. They are used both online and traditionally at stores authorized by the issuer. Common issuers of gift cards include iTunes, Amazon, Google Play, Visa, American Express, Walmart, to mention a few.

Virtual gift cards are cards that cannot be held, felt, or delivered to a physical location. They are otherwise known as eGift cards, electronic gift cards, or Digital gift cards. eGift cards are great for making payments online and conventionally. You can purchase them online and get them delivered to your mail as they are not physically available for home delivery.

Gift cards are prepaid in nature i.e cash value must be loaded on them before spending can be possible. Gift cards are in various denominations as determined by the issuer. Users only need to purchase the amount they would like to have as the money value is stored upon purchase.

Gift cards are essential for ease in gift-giving. To avoid the headache of having to pick the perfect gift for your friends and loved ones, an easy way to go is giving gift cards. They do not carry specific names; you can transfer ownership to another person.

What is a Debit card?

Debit cards are also prepaid money cards issued by banks and other financial institutions to aid fast payment for goods and services at accepted conventional and online stores. Common issuers of debit cards include MasterCard, Visa, Verve, and Discover.

They are attached to a bank account through which they are funded with the bank account’s number. They look just like regular credit cards or gift cards. The amount of money loaded on the card signifies the limit to the amount of transaction the card can make. However, some issuers offer their customers the option to spend beyond what they have loaded on their cards. This option is known as an Overdraft.

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Similarities between gift cards and debit card

  1. Plastic and virtual card: Both gift cards and debit cards are available for physical plastic and e-cards.
  2. Prepaid cards: They both have to be preloaded to aid usage i.e. the card is useless if the current balance is not enough to make payment for what is being purchased. For gift cards, the value of money to be expended is virtually loaded at issuance or purchase of the card. However, debit cards are loaded via the account connected to them.
  3. Used for payment: They both aid online and physical payment. Various stores and online platforms accept the use of gift cards for completing payments for little or many transactions.
  4. Physical and online issuance: They both support online and physical requests and issuance of the card. Gift card issuers are majorly retail conventional and online stores, while debit card issuers are banks and other financial institutions.
  5. Replaceable: This feature is not exactly a similarity because not all gift cards are replaceable. However, all debit cards are easily replicable since they are only attached to a bank account. A debit card can easily get deleted and replaced with another card, carrying another card number, CVV, and expiry date.

Differences between gift cards and debit card

  1. Reloadable: Most gift cards are Non-reloadable. Once the amount purchased and loaded at issuance is exhausted, the card cannot be reloaded. Hence, it becomes useless and should be discarded. A gift card with an empty balance is useful when the owner chooses to return an earlier purchased product. On the other hand, you can reload debit cards anytime via Bank deposit, transfer, or Point of sale (POS).
  2. Gift giving: Unlike gift cards, debit cards are not for gift giving. They are issued in connection to a person’s account without preloaded funds. Thus, there is nothing to be given as a gift.
  3. Monthly fees: Debit cards often attract monthly maintenance charges, while gift cards do not attract such fees.
  4. Pre-set denomination: Gift card issuers usually peg their cards are various denominations for users to purchase. However, debit cards have no intrinsic or predetermined value. Whatever amount the user chooses to load in the account attached is what the card is worth are that moment.

Click here on step by step guide to create an account on Astro Africa to pay bills and redeem or purchase your gift cards.