Buying gifts for friends and family during the holiday season is unavoidable, and many budgets can be put in jeopardy if not done correctly. One option that individuals are known to take advantage of is gift cards, as they are easy. However, some may be spending too much on these options.
Each general-purpose gift card on the market has some type of purchase fee, according to a report from Bankrate.com. On the other hand, just one-ninth of all brand-specific options do the same.
“While most Americans prefer to receive general-purpose gift cards because they can be used almost anywhere, they should be aware of the fees these cards charge both purchasers and recipients,” said Janna Herron, credit card analyst at Bankrate.com. “For example, all of the general-purpose cards that we surveyed charge the purchaser up to $6.95, and 71 percent charge dormancy or maintenance fees to the recipient. None of the brand-specific cards charge dormancy or maintenance fees.”
Citing the National Retail Federation, the report noted that nearly 55 percent of individuals would rather purchase the general gift cards.
Nearly two-thirds of Americans have gifted one of these cards in the past, Bankrate.com explained. And, this number is potentially going to grow, due to income rises in the future.
Spending may rise for consumers around holidays
Financial strategies may need to be adjusted around the holidays for many consumers, as they may be spending more than they initially thought this holiday season.
Approximately 85 percent of individuals noted that they will spend the same amount they did last holiday season or more while shopping this year, according to a report from the Pennsylvania Real Estate Investment Trust. While one-tenth of those polled will use the funds for home goods, close to 15 percent will focus on electronics spending. Another 13 percent will look to buy clothing and other apparel, and 14 percent will focus their funds on gift cards.
Despite looking for more to purchase this holiday season, close to half of those polled will not be earning as much as they did last year, the report noted. Despite this, nearly 45 percent are looking to cut down on debt during the holidays.
Caution is still important to some shoppers. The report added that nearly 40 percent of those surveyed felt that potentially higher prices at the store are worrisome.