Are You Loading Your Stimulus Money on a Gift Card? Bad Idea

So by now many of us have at least heard or read the advertisements concerning getting a great deal when applying your rebate check money to a gift card. While this initially sounds like a good idea to get more money on the gift card than what you paid for it, in the long run it is not.

First, if you do not know by now many gift cards have an expiration date on them. By expiration date I mean that the value of your dollar amount on the card decreases over a long period of time. Many people do not immediately spend the money they have on a gift card, they hold it until an item of their choice is on sale or they just happen to remember they have the card. Lets say that you get an extra 5% added to the gift card balance and you decide to hold on to it for your holiday shopping. You could very well not only lose out on that extra 5% but also the cash you paid out of pocket.

Secondly, how will spending the majority of this rebate benefit you through out the summer or later on in the year? So far we have not heard any confirmed plans on the rising gas prices. Logically spending more than 50 dollars of the 300 dollar rebate will put your back into financial strains before the summer is over; if gas, food and housing prices continue to climb.

Another issue with putting the money on a gift card is ownership. What happens if you do not register the gift card (if the retail store has that capability) and then the card gets lost or stolen? You are out of that cash. Well, you think that this could just as early happen to your wallet or purse. This is true but the likely hood of you losing a single gift card is greater than losing your wallet. Also watch out for people who will try to scam you will a gift card deal by selling them to you independently. Firm rule of thumb is if the deal seems to good to be true when it comes to money, it is dud.

A few good ways to utilize the rebate range from investing in cds, paying down debt, using this money as your vacation funds and putting into a savings account are but a few. Some financial institutions will give you a better rate when you are a first time customer getting a cd. Also you are likely to get an even higher rate at your local credit union. You can also check out online banks like Washington Mutual to see what they are offering. Remember when doing any banking business online make sure that the bank is insured.

By taking a good look at your current debt situation, you can probably pick out one to three accounts that could be paid down or paid off. Although it is usually better to pay off the higher interest earning debt first, you sometimes come out better paying the smaller bills in full first. This way you can apply more money to the larger accounts and end up paying them off quicker. For example, if you have three charge cards totaling a balance of 200 dollars , pay them off. Yes the ten dollars a month looks and sounds good but most charge cards carry a high interest rate and it could take you over a year to pay off the debt. Lets say that your interest rate, is 18.999% and your monthly payment is 20.00. Less than 1 dollar is actually going to the balance of that account.

If you do not want to pay off your small debts, you could put the money up so that if anything unforeseen happens you will have back up money. It is wise to have at least 3 to 6 months worth of your paycheck sitting in the bank, so that when these unforeseen events occur you are not strapped. However, many of us do not have 3 months saving in the bank, what better way to start this habit than to use money that you really were not expecting to have .Just remember what ever you do with the rebate money, make sure it will serve you well in the long run; because we have no clue what the future of our economy will be.