Most of us have a few people on our holiday gift lists that present huge challenges.  Try as we might, we can’t figure out what to actually give these folks.

We used to take care of these problematic recipients by sticking a gift certificate to a popular store in their holiday card or stocking.  That’s not a bad solution.  It gives the recipient a chance to find something that they really want instead of forcing them to pretend as if they’re pleased with an ill-fitting gift.

Gift certificates, however, have some limitations.  They’re issued for a specific store, which decreases the range of options available to the recipient.  Even if you choose a certificate from a popular store, there’s a chance that the recipient doesn’t shop there, that there isn’t a location near them, or that the shop in question simply doesn’t carry what the recipient would like.  It’s better to give a gift certificate than to send a box of aged steaks to a vegan, but it’s still falls short of being an optimal solution.

Enter gift credit cards.  These are “credit cards” in the sense that they work just like a Visa, MasterCard or Amex, but there really isn’t any actual credit involved.  The cards are prepaid and loaded with funds by the purchaser.  Unlike other prepaid credit cards, they generally can’t be “reloaded” after use of the original funds.

In theory, this will allow the recipient to buy something he or she really wants anywhere that takes major credit cards (which is just about anywhere).  It solves the “perfect gift” problem and skirts the inherent limitations of the good ol’ gift certificate.

The flexibility and guaranteed “perfect fit” of prepaid gift credit cards makes them a popular gift idea.  That popularity among consumers has resulted in a variety of product offerings.  You can purchase cards from a number of vendors and some are better than others.

Here are a few things to consider when purchasing a gift credit card:

They aren’t real credit card substitutes. You can buy a pair of pajamas that actually fits at JC Penney’s with one of these cards, but you can’t reserve a rental car at Avis.  In some situations, you need a real credit card to get the job done and gift cards just won’t work.  If the recipient wants a few books from his or her favorite bookstore, a gift card is great.  If he or she wants to book a flight or a hotel room, however, it isn’t going to happen.  Keep your recipient’s probable intended uses in mind when making a purchase.

The devil is in the details. Not all gift credit cards are created equal.  You need to check the “fine print” when making a purchase in order to acquire an optimal gift.  Online Credit Professor explains some of the problems your recipient might encounter if you don’t make a smart purchase:

The problem with gift credit cards is in the fine print. Most of them charge many fees when the card is used, so the recipient of the gift card does not get the face value of the card – a fact that many gift givers do not realize. Another hidden problem is that many of these cards expire within a certain number of months of purchase, or alternatively within a certain time after the first use. So, make sure you understand the details before you buy.

If you need to buy someone a gift and you have absolutely no idea what they’d really enjoy or use, a gift debit card can be a great solution.  Just consider the limitations and check the specific card terms before making a purchase to improve your odds of providing someone with the happiest possible holiday.