Finding the perfect gift at the perfect price is a perennial dilemma.

That's why I like the idea of a gift card.

Sometimes, looking at the gifts I have received over time, I too wish I was the recipient of a gift card instead of a gift.

What's that?

A gift card is just like a pre-paid debit card.

Let me explain.

A credit card gives you a line of credit. Say, your credit line is Rs 50,000. This means you can spend up to this amount in one month and repay it when you get the bill.

A debit card is directly linked to your bank account. So, if you have Rs 50,000 in your bank account, you can spend up to that amount on your card. No bill will be presented to you at the end of the month. The money is directly debited from your bank account.

So, with a credit card, you get a free credit line. With a debit card, you don't.

The gift card uses the debit card principle.

Let's say you go to the bank and pay Rs 10,000 for a gift card. They will issue you a card worth that amount.

Now the person using this card will have a limit of Rs 10,000. As and when it is used, the amount spent will get debited from the kitty.

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It's somewhat like a gift certificate

With both, a gift certificate and a gift card, you -- the buyer of the card -- determine the amount. At the same time, you leave the choice of purchase to the recipient of the gift.

This is where the gift card parts company with the gift certificate.

A gift certificate can only be used in a single store. For instance, a gift certificate from retail outlets like Shoppers' Stop or Westside can only be used in these stores. Ditto for a gift certificate from say, Crosswords; It can only be used at a Crosswords outlet and not at any bookstore.

The gift card is just like a credit card. The bank offering such a card would have either tied up either with MasterCard or Visa. So the person can use it in any outlet where they are accepted.

Moreover, it can be used to shop or even at a restaurant. How the recipient uses the gift card is totally a matte of his or her choice.

What you need to know

~ MasterCard or Visa?
When using the card, make sure that Visa/ MasterCard is accepted at that outlet. 

~ Validity
How long can you use the card? A year or longer?

~ ATM withdrawals
Can the card be used for ATM withdrawals?

~ Value
It could start at Rs 500 and go up to Rs 25,000. Find out how you can keep tab of the balance amount left on the card. You could either phone the bank to find out or even check on the ATM.

~ PIN
Every card will have a Personal Identification Number. This PIN will be used at the ATM to check the limit or make withdrawals.

~ Refillable
Generally, these cards can be refilled once you max the limit. You will be charged a refill fee which could be around Rs 50.
If the card has expired and you have not yet utilised the entire amount, you should be get a refund of the balance amount.

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How do you get it?

IDBI Bank and Kotak Mahindra Bank offer this card. You do not need to have an account with the bank.

Just walk into any of their branches, decide on the amount you want to gift, and buy the card. You can either pay by cash or cheque. IDBI Bank also allows you to buy it online.

Check what the fees are. Kotak Bank charges a flat rate of Rs 100 for this card.

All in all, it makes for a good gift, if you are willing to spend at least Rs 500.

Illustration: Uttam Ghosh