An Early Gift for Christmas 2010?

Here’s another nice piece of regulation on credit cards: gift cards.

The Fed proposed banning any fees for the first year and limiting gift card issuers to one fee a month if the card was not used for at least a year. It also requires clear disclosure to consumers about penalties.

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The rules would also prohibit the cards from expiring before five years had passed from the date the card was issued or five years from the date additional funds were added to the card. The rules would be not be put in place until August 2010.

Who will it affect?

Gift cards issued by banks, malls and credit card companies are more likely to have expiration dates and tack on annoying activation, maintenance, inactivity and transaction fees, according to the National Retail Federation. Some bank-issued gift cards even charge a fee for simply checking the balance, the retail group reports.

The consumers who will spend a total of nearly $4 billion buying general purchase gift cards — those not connected to a specific retailer — pay $4 to $7 for the cards. Some of the card issuers have the audacity to add monthly fees as high as $4.95 if a card is not used six months after purchase. In September, American Express announced it was eliminating monthly fees on all of its gift cards, including those already purchased and stashed away in consumers’ wallets and purses.

Of course, since the new rules won’t go into effect until August, who it won’t affect is shoppers this holiday season. Still, it’s good to keep watching these ways of bilking people out of their money get reined in inch by inch.