Starbucks or Visa gift card, which would you prefer?

I've received dozens of gift cards over the past few years. I've never really minded receiving them because the people who give them to me always know where I like to shop.

But some people complain that the gift cards can be a hassle because they generally limit you to just one store. And many times you have to spend more than the gift card balance to get something you might not otherwise have purchased.

MasterCard, VISA and American Express were quick to recognize this hassle and offer their own gift cards. The difference being that with one of their gift cards, they could be used anywhere their credit card could be used. No more locking the recipient into one store.

Here's the problem. I think the gift cards from MasterCard, VISA and American Express are actually more difficult to use than a single store gift card. Let me explain by comparing some single store gift cards to a VISA gift card.

Starbucks gift card

To use my Starbucks gift card, I go to any Starbucks that excepts the card, order my drink and hand them my gift card. They swipe the card, hand me a receipt and I'm done. If my drink costs more than the balance on my card, the cashier tells me that my gift card balance is zero and asks me how I would like to pay for the remaining balance. I pay the balance with cash or credit card.

Amazon.com gift certificate

To use my Amazon.com gift certificate I type in the code on the certificate into my Amazon.com account and it remembers it for me. Every time I purchase something from Amazon.com it automatically applies the gift certificate balance to my purchase. If for some reason, I don't want to apply the gift certificate balance to my purchase, I simply uncheck a box on the checkout page and the current transaction ignores my gift certificate balance.

Gas card

To use my gas card, I pay at the pump with the gas card just like I would any other credit card. When the balance of the card reaches zero, the pump automatically shuts off and prevents me from pumping more gas than I can pay for with the gas card.

Restaurant gift card

To use my restaurant gift card, I hand the server my gift card just like it was a normal credit card. If I use up the balance of the gift card, I get a second receipt with the remaining balance and I pay that amount with cash or credit card as if the new amount due was my total bill.

VISA gift card

To use my VISA gift card at a Starbucks, I hand my card to the cashier and he or she swipes the card and hands me a receipt. That is unless the balance on my VISA gift card isn't enough to cover the cost of my drink. In that case, I have to tell the Starbucks cashier the exact balance of my card so he or she can run that amount through and then split the remaining amount to another credit card.

To use my VISA gift card at Amazon.com, my only hope is that the item I am buying costs less than my VISA gift card balance in which case it's business as usual. But if the item costs more than my remaining gift card balance, I'm out of luck.

To use my VISA gift card at a gas station, I have to hope I have a large enough balance on the gift card to cover the pre-authorization transaction initiated by the gas station. In many cases this is $50 or $75 so good luck trying to use up your VISA gift card at the gas station.

To use my VISA gift card at a restaurant, I once again have to hope I have a large enough balance on the gift card to cover the pre-authorization transaction initiated by the restaurant. This is usually upwards of an additional 20% of the transaction amount since the restaurant is trying to make sure you are authorized for enough money to cover a potential tip. And if you are lucky enough to get through that sticky situation, see how you feel when you are trying to use up the balance of the card and have to ask the server to run your tip through the system to close your check so you can make sure his or her tip was approved on your gift card. Better hope you left a good tip!

The point I am trying to make here is that credit card company gift cards often end up being more of a hassle than single store gift cards. Most of the time it feels like you are carrying around a credit card with a $50, $75 or $100 credit limit.

Disagree with me? Leave a comment and let me know why.