Stretching Your Holiday Budget
This holiday season, many consumers are looking for ways to save money on their holiday shopping. Unused gift cards and credit card rewards may be exactly what you need to buy the gifts for the people on your list, while keeping money in your pocket.
Here are some tips for holiday savings using your gift cards, credit cards
and airline miles:
* Use your unused gift cards to purchase presents for others on your list. "If you haven't used the gift card for yourself by now, you aren't going to miss it, and you will help your holiday budget by saving the value of that unused card," says Bill Hardekopf, CEO of LowCards.com and author of The Credit Card Guidebook. "This is also a good time to look at the fine print of each of your gift cards. If you wait over a year to use your gift card, you may start losing the value through a monthly fee that is typically $2.50."
* Use reward points for holiday shopping. If you have a reward card, you may have unused points piling up. Redeem these for gift cards or merchandise. For example, with an American Express Starwood Preferred Guest card, you can redeem 2,800 points for a $25 Pottery Barn gift card, a $25 Williams Sonoma card or a $25 Gap card. Discover offers up to double cash rewards when you redeem your points for gift cards from their award partners such as AMC Theaters, Borders, Overstock.com, Bed Bath & Beyond, KB Toys or Macy's. You can give these gift cards away as gifts, or use them to purchase gifts, with no additional cash out of your pocket.
Many cards offer online malls where you can shop with your reward points. Citi ThankYou Network offers a wide variety of merchandise, including movies, books, appliances, gadgets, and outdoor grills.
"If you aren't saving your reward points for something specific, this is good time to use points and save money. Issuers are looking for many ways to cut costs and their liabilities. There is no guarantee that the reward programs will remain the same in the future," says Hardekopf.
* Take advantage of reward partners to earn extra points. Many issuers have reward partners that offer extra points for purchases made with the card. For example, Target.com offers six points per $1 spent with a Citi card.
* Some frequent flier programs have miles that expire when your account has been inactive for a period of time. "Check to see if your frequent flier miles could expire. If they are about to expire and you don't have enough miles for a free trip, you may want to use these miles to purchase other merchandise or magazines for someone on your Christmas list," says Hardekopf.
* Research the company before you buy their gift card. In these tough economic times, some retailers are declaring bankruptcy, making their gift cards worthless. A number of major retailers have declared bankruptcy in 2008 including Circuit City, Mervyn's, Linens-n-Things, Sharper Image, Mrs. Fields Cookies, Shoe Pavilion, Whitehall Jewelers and Harold's.
Here are some tips for holiday savings using your gift cards, credit cards
and airline miles:
* Use your unused gift cards to purchase presents for others on your list. "If you haven't used the gift card for yourself by now, you aren't going to miss it, and you will help your holiday budget by saving the value of that unused card," says Bill Hardekopf, CEO of LowCards.com and author of The Credit Card Guidebook. "This is also a good time to look at the fine print of each of your gift cards. If you wait over a year to use your gift card, you may start losing the value through a monthly fee that is typically $2.50."
* Use reward points for holiday shopping. If you have a reward card, you may have unused points piling up. Redeem these for gift cards or merchandise. For example, with an American Express Starwood Preferred Guest card, you can redeem 2,800 points for a $25 Pottery Barn gift card, a $25 Williams Sonoma card or a $25 Gap card. Discover offers up to double cash rewards when you redeem your points for gift cards from their award partners such as AMC Theaters, Borders, Overstock.com, Bed Bath & Beyond, KB Toys or Macy's. You can give these gift cards away as gifts, or use them to purchase gifts, with no additional cash out of your pocket.
Many cards offer online malls where you can shop with your reward points. Citi ThankYou Network offers a wide variety of merchandise, including movies, books, appliances, gadgets, and outdoor grills.
"If you aren't saving your reward points for something specific, this is good time to use points and save money. Issuers are looking for many ways to cut costs and their liabilities. There is no guarantee that the reward programs will remain the same in the future," says Hardekopf.
* Take advantage of reward partners to earn extra points. Many issuers have reward partners that offer extra points for purchases made with the card. For example, Target.com offers six points per $1 spent with a Citi card.
* Some frequent flier programs have miles that expire when your account has been inactive for a period of time. "Check to see if your frequent flier miles could expire. If they are about to expire and you don't have enough miles for a free trip, you may want to use these miles to purchase other merchandise or magazines for someone on your Christmas list," says Hardekopf.
* Research the company before you buy their gift card. In these tough economic times, some retailers are declaring bankruptcy, making their gift cards worthless. A number of major retailers have declared bankruptcy in 2008 including Circuit City, Mervyn's, Linens-n-Things, Sharper Image, Mrs. Fields Cookies, Shoe Pavilion, Whitehall Jewelers and Harold's.
