Recently, my mother gave me a $50 Visa rebate card that she had been holding onto for a few months. She warned me that after some time, Visa deducts about $3 from the card. She thought it was after a year, so the card should still have it's full value. Excited to have some extra money, my boyfriend and I splurged at our favorite Indian restaurant. Our grand total came to just under $50, which was perfect, since we planned on leaving the tip in cash. After giving the waiter the card, he returned a few moments later to tell us it wouldn't go through. He went on to explain that they often have trouble with these types of cards, because they have no way of knowing the actual balance and are unable to charge a balance exceeding that which is on the card. The waiter ended up splitting the bill, charging only $40 to the card, an amount that was available. I left the restaurant not knowing how much money I had left; I also wondered what happened to, at the most, ten dollars.

Later, we went into CVS Pharmacy to buy some chocolate, and the cashier there was able to tell us how much money remained on the card. When I added what was left to the $40 we previously spent, I figured out that my mother was wrong in her assumption that Visa deducts after a year; in fact they deducted only after a few months. Again, our total was split between cash and the card, allowing us to finish off the remaining balance. Even though I know this wasn't a big deal (in fact, I am very grateful for my mother's generosity), at the end of the night I felt a bit annoyed about the minor hassle this rebate card caused.

The Hidden Fees of Rebate Cards

Today, many stores are making the switch from good old fashion rebate checks to the more "modern" rebate cards, which are sponsored by a particular credit card company. These rebate cards appear to act like a debit card, but if you're not aware of all the fine print (like myself), you might find yourself having some trouble when you finally end up making a purchase. There are dozens of stories out there from others who have had difficulty using their prepaid rebate cards: The Consumerist posted a story similar to mine, while a local ABC news station describes a more serious account of a man who was actually billed by a credit card company when someone else went over the limit of his rebate card!

As long as you are aware of any hidden fees or potential limitations that your card might have, you should be able to make the most out of your experience. For starters, most rebate cards are not limited to a specific store, like many gift cards. They are, for the most part, treated as a debit card and are accepted wherever the credit card logo which appears on your card is accepted. After this, debit and rebate cards begin to veer off in different directions.

Rebate cards usually come with a variety of fees. There could be some, none, or all of these: activation fees, checking your balance fees, inactivation fees, exceeding your balance fees, replacing a lost card fees. The Consumers Union suggests that before you use your rebate card, you understand all the fees that are attached to your card. It is also important to remember that unlike gift cards, rebate cards can have expiration dates. And if they don't, your balance might be drained anyways from periods of inactivity. If that is the case, you want to know how much money is being deducted, as well as how often, so you can keep track of your balance. (Rebate Cards. DefendYourDollars.org, par 7-8).

By far, one of the most useful tips that the Consumers Union offers is to keep track of your balance, since unlike gift cards, many store receipts do not print off the remaining balance of rebate cards. And because of the nature of most rebate cards, stores usually cannot charge an amount to the card that is over the balance. It either has to be under or exact. As long as you know your exact balance, you should make sure you spend your remaining balance at a store which performs split transactions, so you are not left with any unused money on your card (Rebate Cards. DefendYourDollars.org, par 9). Even if it's just $.50, it's better that you spend it than have the credit card company eventually deduct it.

Rebate cards are popping up all over the place, so hopefully more and more people will be aware of the fine print and won't run into any problems. But if you ever have the choice to choose a check over a rebate card, maybe you might go for the check because the biggest downside to these rebate cards is that you are forced to spend the rebate rather than save it in the bank. If you were planning on spending your rebate, then this isn't an issue, but if you are someone who is trying to put away some savings, the rebate card isn't necessarily the best option.