Stretching Your Holiday Budget

December 10, 2008, Written By Sarah Hefner

Many consumers are looking for ways to save money on their holiday shopping this season. Experts suggest that 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 have not used the gift card for yourself by now, you probably will not miss it, and you will help your holiday budget by saving the value of that unused card. This is 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, which 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 are not saving your reward points for something specific, this is good time to use points and save money. Issuers are looking for ways to cut costs and their liabilities, so there is no guarantee that the reward programs will remain the same in the future.

* 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 when your frequent flier miles expire; if 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.

* Research the company before you buy its 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.


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The information contained within this article was accurate as of December 10, 2008. For up-to-date
information on any of the terms, cards or offers mentioned above, visit the issuer's website.