Sunday, January 3, 2016

Why Buying Gift Cards to Save For Christmas is a BAD Idea

FTC disclaimer:  This post may contain affiliate links.

I have seen it mentioned on social media that you should buy a gift card each month to help with Christmas spending for next year.  This is NOT a good idea, no matter how many people think it is.  Here are a few reasons why:

1.  You will be limited at what stores where you can do your shopping.  What if you find a great deal at Walmart but stocked up on Amazon gift cards?  You'll be out of luck.

2.  If you use a "generic" gift card, such as a pre-paid Visa you will be paying extra fees.  These can cost as much as $6 each.  So instead of paying $60 to "save" money, why not just put the money in specially designated bank account and earn interest instead of paying to "save".

3.  Gift cards can have dormancy fees.   I've had multiple gift cards eaten up over the years with fees because some required a purchase a month from the time the gift card was purchased.  Most aren't that stringent, but why risk it.

4.  Gift cards (especially pre-paid credit card ones) do get compromised.  What if you waited until November and found that one of your cards was no longer good because a thief used your card?

5.  Gift cards and Gift certificates can expire.   When I get a gift card I spend it as quickly as possible.  No only can it get compromised, but I've missed out shopping at a number of places because I waited too long to use a gift code.  I realize not all do, but why risk it?

6.  If you look around there are often incentives at banks to open a new account.  Let your money work for you instead of you working f
or your money.  The offer is no longer available, but I once signed up for an offer that deducted $50 a month from my checking account and at the end of the year, they gave me an additional $100.  So I had $700 PLUS interest from my $600 at the end of the year rather than a stack of gift cards.

If you really want to stock up on gift cards, let me recommend you buy Amazon gift cards.  I would add them to my account right away.  The link here is to one that comes in a free gift box.  While not as good of an idea as just saving money to use at Christmas, at least you would have a gift box where you could give a gift card to someone.

1 comment:

  1. It's true! If I can't get something at Amazon, I suddenly feel like it's a hassle. I'm spoiled, I know. But Amazon has great prices and even better reviews. More than anything, if someone wants to give me a gift card, Amazon is the way to go!