FAQ about American Express Prepaid Debit Gift Card

Do you have an American Express prepaid debit gift card?  Lately, I have a couple of these and have been taking a closer look at it.

Q1. Is there a purchase surcharge for the card?

Yes.  The fee varies based on the type of merchant seller.  Grocery stores's $4.95 charge lower fee than Staples, OfficeMax and OfficeDepot's $6.95, for a $200 prepaid card, likely because of the difference in bonus categories.  Chase Ink earns 5x for purchases in office supply stores, whereas American Express Premier Gold earns 2x for grocery purchases.

Q2. How to register an American Express prepaid debit gift card?

For online transaction, registering the prepaid gift card would be necessary.  AMEX gift card website does not handle gift card registration.  Call 1-877-297-4438, enter gift card account number and the 3-digit security code at the back of the card, to talk to a live American Express customer care.  The entire process takes about 15 minutes, because the AMEX personnel processes registration information carefully.  I requested to register multiple AMEX prepaid gift cards in one call.

Q3. Should the 4-digit code at the front of the card or the 3-digit code at the back of the card for online transaction?
The 4-digit code.  This code is not required for in-store purchase. 

Q4. Why is there a $1 transaction show in the gift card transaction history?

For each online transaction, a $1 is charged temporarily to verify registration information.  In online purchase, we typically need to provide card user name and billing address.  Eight days later, the $1 charge will go away.  Therefore, for a $200 AMEX prepaid gift card, maximum allowable credit to be used for online purchase is $199 in one single transaction.

Q5. How to use the $1 credit left in the card?

Typically, when my AMEX prepaid gift card has about $15 remaining, I would go to a gas station, show the card to the clerk and ask to pump $15 worth of gasoline.  There are also other options.

Q6. Can I withdraw cash from it via ATM machine or grocery store kiosk?
Even though it is prepaid card, it would not work for cash withdrawal.

Q7. Which is the best prepaid debit gift card?  Visa, MasterCard or American Express.

I would vote those issued by Visa or MasterCard.  They are more widely accepted because merchant pays lower transaction fee if paid by Visa or MasterCard.

Q8. If there is a surcharge fee, what are these prepaid debit gift cards good for?
Say you are 5 days away from the deadline to meet minimum spending requirement for your new credit card to earn sign-up bonus and you are still short of $500 spending, purchasing prepaid gift card Visa/MasterCard/AMEX $500 from a grocery store would be one good option, particularly when there is $10 bonus.  Please remember there is a surcharge fee of at least $5.  My general rule of thumb about gift card amount purchased should be no more than 25% of the minimum spending requirement, because the credit card issuer may not like it and not approve the sign-up bonus.

Because it is a prepaid gift card, it is like cash.  Losing it is equivalent to losing cash.

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