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no debt no sweat!

Gift Cards: Good or Bad?

By Steve Diggs
No Debt No Sweat! Financial Seminar Ministry

CBN.comI was recently doing some research on Gift Cards for a weekly TV segment that I do on the FOX morning show in Nashville. And, I ran across a curious piece of data: This year there will be approximately 20 percent more people giving gift cards than there will be people wanting to get them! That stat struck me. I wondered why. Then it occurred to me: Maybe people give gift cards because they’re easy—and require little effort. And, maybe recipients don’t like them because they can be a real pain.

Granted gift cards are simple—but they do have some real downsides. Let me share a few things to consider, before selecting a gift card this season.

1. Some gift cards have expiration dates. While many store cards do not have expiration dates, you may find, according to, that the Visa or Master Card you give expires within a year or two. Some may begin charging a monthly service fee after a year or two.

2. Unlike the old-fashioned gift certificates, gift cards may leave you with a wasted balance. Do you remember the old gift certificate that your grandmother gave you for $20 for merchandize at the toy store? If you bought something for $18—they gave you the remaining $2 back in change. But, with a $20 gift card it doesn’t usually work that way. If you spend $18 of its value—you simply are left with a $2 credit. Many of these $2 credits never get spent—thus leaving retailers millions of dollars in “free” money. Or, you end up buying something for $8 that you really don’t need—not to “waste” the last $2 on the gift card.

3. Some gift cards charge fees. Many store cards don’t. But often, the Visa, Master Card, and Mall cards do. These fees (frequently $3-$5 per card) can add up in a hurry.

4. Beware of bankrupt retailers. As the economy worsens, it’s probable that many more retailers will close their stores. If you get a gift card from a retailer that closes, chances are you’ll be out of luck. There aren’t a lot of laws protecting consumers in this area—and besides, how much of your time and effort do you want to put into getting someone to make good on a $50 gift card. If you are given a gift card, consider using it quickly. After all, the week after Christmas is usually a great time to find bargains.

5. Think about giving gift cards for essentials. With more people losing their jobs, this might be a good Christmas to give “practical” gift cards. Why not give a gift card for groceries, or gas, or even to pay utilities?

Steve DiggsSteve Diggs presents the No Debt No Sweat! Christian Money Management Seminar at churches and other venues nationwide. Visit Steve on the Web at  or call 615-834-3063. The author of several books, today Steve serves as a minister for the Antioch Church of Christ in Nashville. For 25 years he was President of the Franklin Group, Inc. Steve and Bonnie have four children whom they have home schooled. The family lives in Brentwood, Tennessee.

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