The New Plastic Brings Added Benefits This Holiday Season
Take Charge America says Consumers Can Manage Holiday Spending and Teach Valuable Financial Management with Plastic
PHOENIX, Ariz. (September 23, 2004)...For some holiday shoppers, finding a special gift for a loved one can be a painstaking process, involving a great deal of decision-making and searching for the perfect present, not to mention fighting off crowds at the mall. However, for an increasing number of those who purchase prepaid gift cards, holiday shopping is a breeze.
Gift cards accounted for 10 percent of the $226 billion in holiday sales in 2003, according to, “Holiday Retail Strategies 2004: How Christmas Shopping Trends Will Shape the 2004 Season,” a study provided by Packaged Facts, a publishing division of MarketResearch.com. The International Council of Shopping Centers (ICSC) reported that in 2003, sixty-eight percent of Americans gave or received a gift card during the holiday season.
The interest in gift cards is on the rise, in part because of the innovative ways they are being provided. “Today’s gift cards are more flexible and can provide many more benefits than ever before,” said Mike Sullivan, director of education for Take Charge America (TCA), a consumer credit counseling company. “The new plastic provides opportunities for budgeting and managing money during the holidays and beyond.”
“The holiday season is a crucial time for families to create money-saving budgets and adhere to them,” said Sullivan. “By researching prepaid gift cards and learning how to manage them, families can avoid unwanted credit card bills and prevent credit debt to start the New Year right.”
Sullivan said that parents should consider purchasing prepaid check cards for teenagers instead of debit or credit cards. These cards can be given as a “coming of age” holiday gift or even before the holidays to help teens stick to family holiday spending guidelines. “Families need to sit down and establish budgets for holiday spending with their children or it can spin out of control,” said Sullivan. “Parents need to assist their children in determining who they need and want to buy presents for and then set budgets for each gift. A prepaid check card can help ensure that the budget is not exceeded.”
Monitoring Spending While Offering Independence
For example, the Visa Buxx prepaid cards are available for children ages 13 or over and make a great gift — parents can control spending limits and teach their children valuable budgeting and money management skills, while giving teens the independence they want. Purchases and balances can be monitored online — a great way for teenagers to see how quickly even little purchases can add up.
Parents can also authorize friends and family members to put money on their child’s Visa Buxx card instead of mailing a check or cash during the holidays. Sullivan said that this is a great way for grandparents to see how their grandchildren are spending their Christmas money. There is a small “per transaction” charge to the person adding value to the card.
Added Security and Flexibility
In addition to the flexibility and convenience of prepaid cards, they also offer added security when making purchases on the Internet. Purchases can not exceed the dollar amount that was previously added to the card. Therefore, if the card gets lost or stolen, excessive charges can not be made. However, just in case, Sullivan suggests adding amounts just large enough to cover purchases to prevent extreme losses. As an added security feature, some companies provide for online registration of cards so that the card can be cancelled and reissued in case it is lost, stolen or destroyed.
Many stores, as well as shopping centers, have implemented prepaid cards in place of gift certificates. Most such gift cards do not have a set dollar amount. When purchasing a prepaid card for a holiday gift or as a holiday shopping tool, the purchaser can decide exactly how much he or she wants to put on the card. These gift cards often resemble credit cards, and are therefore more durable and less apt to be lost. Like credit cards, gift cards can be graphically designed to suit an individual’s preferences.
Beware of Hidden Fees and Diminishing Value
Although purchasing gift cards for friends and family members during the holidays is relatively simple and straight forward, Sullivan warns consumers to beware of any additional fees that may be incurred by some cards. Before purchasing a card, Sullivan suggests that people read the small print and inquire about additional fees or surcharges. Some gift cards may expire within a year of activation and may require a “reactivation charge.” Others may lose a percentage of their face value monthly or annually after a set date.
Planning for the New Year
As the season of holiday spirit draws near and gift-giving becomes the basis of most shopping habits, people should also consider managing personal finances with the use of prepaid cards. Sullivan said that preparing appropriate budgets and managing financial situations is a New Year’s resolution that everyone should make. By planning for “the extras,” such as entertainment or vacation costs, and adding a realistic amount to a prepaid card, families can save for the upcoming year. Additionally, families can ensure they spend only the amount that was originally added to the card for that purpose in order to prevent overspending.
Several credit card companies, such as Visa USA, offer flexible prepaid cards that can be used wherever Visa debit cards are accepted. Upon purchase, a preset amount can be placed on the card to control costs. The Visa prepaid card can be a great tool for the consumer who has a bad credit history and therefore can not obtain a credit card. Sullivan said that in today’s technology-advanced society, Americans should have at least one credit card that can be used in case of emergency. He added that some purchases, including airfare or hotel reservations require a valid credit card. In most cases, the prepaid cards can be used in much the same way as a credit card. In addition, the card is a valuable identification source since it looks much like a traditional Visa credit card.
“Prepaid gift cards have become increasingly popular during the holidays but they can be of great use all year long,” said Sullivan. “They are valuable tools for teaching money management and budgeting skills, and can be easily managed to fit any lifestyle. However, the thing to remember before doing ANY shopping for a loved one or for yourself is to learn how to manage your own money, especially during the season of gift-giving and holiday sales.”
About Take Charge America
Founded in 1987, Take Charge America, Inc. (TCA) is a non-profit 501(c)(3) charitable organization headquartered in Phoenix, AZ. TCA is committed to helping consumers gain control of their finances and offers a variety of services including education, budget and financial counseling, and when necessary, debt management.
TCA also serves as an effective resource for the business community. We help financially distressed consumers re-organize their finances and return hundreds of millions of dollars annually to financial institutions, professional service providers, and businesses of all sizes and descriptions that may otherwise have been lost to the economy in bankruptcy. TCA’s diversified programs are utilized by tens of thousands of families and single men and women throughout the United States each year.