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Smart Buying

Gift Cards Keep On Giving

With fewer strings and fees attached now, gift cards are a more attractive option.

Your holiday shopping list just got simpler. New federal rules make the ever-popular gifts of last resort even more appealling -- and guilt-free. If you give a gift card now, you can be sure it won't expire for at least five years from the date of purchase. If the card expires and there's money left on it, a replacement card is free. Plus, your recipient can't be slapped with a dormancy fee unless he or she hasn't used the card for a year.

The new rules apply to retail cards as well as those with the American Express, Discover, MasterCard and Visa logos. They do not, however, apply to reloadable debit cards that are intended to substitute for a checking account, such as Visa's TravelMoney, MasterCard's Travel Card and cards aimed at teens, such as American Express's PASS card. Nor do the rules apply to cards that you receive as a reward for purchasing an item or as part of a promotion. Those cards may expire after one year.

Cards issued by major retailers tend to be popular with gift givers because there is no charge to buy the card -- you pay just the amount you load on it. Sears's gift cards are particularly attractive because they may be used not only at Sears, but also at Kmart, Lands' End and The Great Indoors. Sears doesn't charge an activation or a dormancy fee, and the cards do not expire. Neither do gift cards from Target and Wal-Mart.

It will cost you about $5 for most general-purpose cards, and you may have to pay a maintenance fee, too. American Express charges $3 to $7 for its gift cards, depending on the denomination, but no other fees. Discover sells its card for $3.95 and charges a $2.50 fee if you do not use it for a year.