Get the most from your gift card

Credit Card Gift Cards -- American Express charges $3.95 for its cards, whether you're buying a $25 card or a $3,000 one. Visa also charges $3.95 for cards purchased at bank branches and tacks on a $2.50 monthly fee after the first 12 months following the purchase date. (SXC)

Americans love giving gift cards during the holiday season. In fact, gift card sales are expected to reach $100 billion by 2012, according to TowerGroup, a research and advisory firm.

Yet recipients don't always remember to use them.

If you receive a gift card during the holidays, don't let it collect dust. Make it easy to reach for the gift card instead of your hard-earned cash. That means you want it with you when you're likely to be shopping, not at home in your sock drawer, says Hillary Mendelsohn, author of "thepurplebook" series of online shopping guides and founder of thepurplebook.com.

Mark your calendar

The Credit Card Accountability, Responsibility and Disclosure Act of 2009, or Credit CARD Act, limits some of the fees that gift card issuers can levy. Here's the rundown on the three major protections you need to know about if you're using gift cards:

Funds on the cards must be good for at least five years. Money added later must also be good for at least five years. Issuers generally aren't allowed to charge any fees within the first year after a gift card is purchased. You can be charged a fee to purchase the card or to replace a lost or stolen card.

"After one year, an issuer is limited to one fee per month," says John Breyault, the director of the National Consumers League's Fraud Center. 

"Make sure you're aware of any fees associated with the cards you receive," says Michelle Jun, a senior attorney with Consumers Union.  "Use gift cards within a year of when they were purchased," she adds. 

"One good way to remember how long you have is to mark your calendar," says Mendelsohn. "That way, you won't lose your gift card's value to fees or forgetfulness."

Know the different types of gift cards

Gift cards come in two basic flavors: closed loop, or those specific to one retailer or retailer group, and open loop, or general, network-branded cards that can be used anywhere.

"Each has benefits, so it pays to know which one you have or want to give," Breyault says.

With closed-loop cards, offered directly by retailers, there are usually no fees -- either at purchase or later. You'll pay $50 for a $50 gift card.

The downside: If the retailer has no locations nearby or no online shopping site, closed-loop gift cards can make shopping inconvenient. If the store goes under, the card could be worthless.

"Times are tough," Breyault says. "You never know who's going to make it and who's not."

Open-loop gift cards often carry the imprints of major card networks, such as Visa, MasterCard, Discover or American Express. They typically can be used almost any place that accepts that brand. The trade-off: "Consumers usually pay a fee to buy the card," Breyault says. After the cards are a year old, the issuer could assess other fees.

Pair your gift card with a coupon

"Retailers often don't let you combine coupons," says Mendelsohn. "But you can combine gift cards with coupons to really leverage your buying power," she says.

"You have free money, and you can use a coupon," says Mendelsohn. "So take advantage of it."

Her tip: "Go online and search the retailer's site for either coupons or coupon codes. If the discount doesn't specify "online only," the retailer has to honor it in the store," Mendelsohn says.

"And if you have a smartphone, you can carry the online coupon there, just in case you need to show it to the clerk," she says.