Is Cash still King?

Don’t let the recent IPO’s of Visa and MasterCard fool you.  There are a few reasons that some refuse to pay on credit or people that have been ripped off because of retailers who went bankrupted such as Sharper Image.  We may have to rethink the “cash is king” syndrome once more.  This explains about gift cards and the potential pitfalls.

Gift cards are a popular choice, both as gifts and even as rewards points and program redemptions. Unfortunately, sometimes this great idea is not as great as it seems. Gift cards can expire, companies can shut down or declare bankruptcy, or a multitude of other situations can arise that can entirely devalue your gift cards. There are several types of gift cards, and some may come with specific conditions, fees or other problems. Know what you are buying before you buy for the smartest gift card shopping…or simply fork over the cash and let the recipient decide how to spend it.

There are two basic types of gift cards. The first are store specific cards. These are the gift cards that you pick up at the check out on your way out the store. They might work at a single store or possibly at several stores; however, the actual options for these cards are rather limited. Some retailers allow you to use their gift cards online, while others do not. General purpose gift cards from Visa, MasterCard or American Express may be used at most retailers; however, there are some limitations, including airline tickets. While these general purpose gift cards offer great flexibility, they may come with many additional fees.

Some gift cards do come with an expiration date. Be certain to note the date if this is the case. You may be able to request a new gift card from retailers if yours expires, but there will be additional fees for this. Also, a few states have disallowed expiration on gift cards, and if you live in one of these states your gift cards will not expire. Service fees may apply when you buy gift cards, depending upon the state in which you live. You also may find that shipping fees for gift cards can be higher than is reasonable. Shop around to avoid these fees. Keep in mind when giving a gift card that businesses do find themselves in bankruptcy proceedings or simply shutting down. In these instances, gift cards may become totally worthless. General purpose gift cards may charge monthly maintenance fees after a certain period, or may charge additional fees for ATM withdrawals.

Gift cards can be a good option if you need an easy and appealing gift, but you should shop smart, or simply give cash to the recipient. Avoid cards with substantial fees, and choose cards that do not expire whenever possible. Be certain that you choose reliable retailers for store specific gift cards, and try to select cards that allow the recipient to shop online or in person for the most versatility.