What is a gift card?

• A. A loan from bank
• B. A prepaid card with a set amount
• C. A type of credit score
• D. A budget category

Answer: (D)

Gift cards are prepaid cards that come with a specific amount of money loaded on them. You or someone else puts money on the card, and you can use it to buy items up to that balance. They’re a way to give someone spending money without handing over cash, and they’re limited to the store or brand the card is for. This isn’t a loan, because you’re not borrowing and paying back later, and it isn’t a credit score, which is a measure of your borrowing history. It also isn’t a budget category, which is a way to plan where your money goes; a gift card is a form of payment with a fixed amount. Gift cards can be physical or digital, and there may be rules about expiration or fees depending on where you are.