Clever Gift Card Strategies to Save on Christmas

A significant amount of the credit card debt amassed in the U.S. is accumulated during the Christmas holidays. According to a recent report, the average American spent $882 on Christmas gifts in 2015. What is even more fascinating is the fact that this number does not include meals, décor or clothes. Not only do a large number of people rack up far more debt than they should, but many of them are also paying interest rates that are considered exceptionally high — meaning that people will be paying for their Christmas purchases long after the holidays.

Fortunately, there are a number of alternatives to the exorbitant spending that has become the norm over recent years. It is still possible to celebrate Christmas with gift giving, with racking up so much debt. One of the most ingenious ways to save money on your Christmas shopping is to use the discounts offered through different retailers and merchants — allowing you to make most of your purchases at a discounted price.

Following a several clever gift card strategies to help you save on your Christmas spending.

Purchase Gift Cards at a Discount

Many merchants will sell face value gift cards at a discounted price, allowing you to get more for each dollar spent. For example, a $100 gift card may be sold for $80, allowing you to save $20 on your purchase. You can then give the gift card to a loved one, so that they can choose what they want to spend the $100 dollars on, or you can actually make the purchase yourself.

Use Gift Cards to Set and Maintain a Spending Budget

When you are paying cash or using credit card, the amount that you spend can quickly get out of hand; however, when you set a specific budget and then purchase gift cards in amounts that correspond with the budget you have set, it will be easy to remain inside of the initial budget. Shopping is an emotional experience, and merchants are counting on your emotions to be in overdrive during the holidays. When taking the time to plan out a budget and then manage the budget by using a gift card strategy, you will save many and reduce your accrued debt over the same period.

Special Discounts Associated with Gift Card Purchases

Not only do merchants sell their gift cards at a discount, but they also offer sales and discounted prices for people who shop with gift cards. It is possible for you to save an additional five to 10 percent, or more, on purchases in which you use the gift card.

Take Advantage of “Give One, Get One” Offers

During certain times of the year, including Christmas, Mother’s Day and Father’s Day, retailers will make offers in which you can buy one gift card and get another of equal or lesser value for free. Using this promotion as a strategy to save on spending can help cut your spending cost by as much as 50 percent. The idea is to develop a specific list of the things that you are looking to purchase, so that you can determine the total cost of Christmas spending — giving you a target number for your spending. Once you come up with the number, you can now purchase gift cards that total a value of half of the total amount — getting the second half in the form of free gift cards.

Why So Many Retailers Offer Gift Cards at a Discount

One of the reasons that merchants will offer gift cards at a discounted price is that it is not uncommon for the recipient of the card to tuck the card away for a later date and forget about it. When this happens, the merchant has actually generated revenue without exchanging any product. It basically amounts to 100 percent profit. It is estimated that the average person has $300 in unused gift cards, and it is estimated that over $41 billion in gift cards went unused last year alone.

One of the most common causes for failure by recipients to use the card is the fact that they don’t normally shop at the retailer on a regular basis. Another problem that is pretty common is the fact that the items that are for sale at the retailer are so expensive that the gift cards does not cover a complete purchase. This is why it is immensely important to understand who you are buying for — to know what they like and the places they like to shop — increasing the chance that they will actually make use of the card that you give them.

It is easy to find discounted gift cards online. You can find savings that range from as low as three percent to as high as 30 percent.

How to Use a Discounted Gift Card

Basically, purchasing a discounted gift card is tantamount to giving yourself a coupon for your purchases in a particular store. While you could simply just give the gift card to the recipient for them to spend at face value, you can also use the card to make purchases yourself, which make the gift more personal. For instance, you can purchase a $250 gift card at Target for $169.62, providing you with a savings of $80.38. Using this approach, you will get a lot more bang for your buck. These discounts increases your spending power, allowing you to stretch your money and lower you total expenditures.

While gift buying is a part of the holiday tradition, you don’t have to go into debt to participate in the tradition of giving. Purchasing gift cards that you can either use for your Christmas shopping or actually pass out as gifts, will help you save a significant amount of money, while ensuring that you are able to maximize your purchasing power. The idea is to celebrate the holidays through giving, not to go broke in the process. Discounted gift cards will definitely help to ease the financial burden associated with the Christmas holidays. So, start making out that Christmas gift list to determine your total budget, then choose the merchants that you want to buy from for your family and loved ones.