Holidays
Finance: Give Gifts that Give Back
Sat Nov 27, 2004 04:56 PM ET
WASHINGTON (Reuters)
- The holiday shopping season officially starts this week, but many halls are already
decked and many consumers' budgets are already stretched.
Holiday spending is up almost 20 percent from the
same time last year, reports Visa, and momentum is building.
This year will see more gift cards -- topping apparel
for the first time ever, says Deloitte & Touche -- along with 33.7 percent more
online shopping, more credit card promotions, and more worries. Money is the No.
1 concern for most American consumers around holiday time.
By the time the holidays are over, consumers typically
have spent about 30 percent more than they intended.
"Many people are still paying off their credit cards
from last Christmas," says Howard Dvorkin of the Consolidated Credit Counseling
Services. "In the back of people's minds, they know their stress will be worse in
January when they must face the stack of bills."
Here are some tips to help you give great gifts,
make the most of the holidays and still feel good for the new year.
-- Use an Internet portal that gives you something
back. There are many shopping sites that let you click through to favorite retailers
and offer you some cash back on your purchases. Each has different rules and retailers,
so look at a few and choose the one that works best for you. Check out http://www.Butterflymall.com,
https://www.Ebates.com, http://RebateShare.com and http://FatWallet.com, or look
for a list at http://rebateportals.com.
-- Comparison shop via http://www.shopping.com or
http://froogle.google.com. Both allow you to view shipping costs along with product
prices so you can make a true comparison.
-- Don't go to stores unless you're on a specific
mission. Using the mall as entertainment is costly: There's the food court, those
by-the-entrance impulse items and the stuff you end up buying for yourself.
-- Stock up. When you do find a good deal on generic
gifts like chocolates, candles, and the like, buy a bunch. You know you'll get invited
to parties and need to bring something, or your neighbor will drop by with a gift
for you, and you'll want to reciprocate.
-- Give gift cards, especially to teens. They love
them, because it gives them total freedom to get what they want, and because it
also makes them feel like they have a credit card. Visa, Mastercard and American
Express all offer generic, good-anywhere gift cards that look like credit cards
but are prepaid by the giver.
Compare issuers (most banks issue
at least one)
as they usually carry fees -- though they vary and may be minimal. An Amex card, for example, costs just $3.95, and in the past some issuers have offered MasterCards
for free. Specific store cards don't usually carry fees, though they are slightly
less fun.
-- Play your own cards right. Find a cash rebate
credit card and put all of your purchases on it. Then pay the
bill off in the first
month you receive it. If you can't do that, watch your mail for one of the super-cheap
balance transfer deals likely to come your way within the next couple of months.
If you think you'll be carrying the balance for a while (tsk, tsk), transfer it
to the card carrying the lowest balance transfer rate you can find. Then don't put
any new purchases on that card until the balance is burned. Use your rebate card
for new purchases, and pay it off monthly.
-- Give charitable gifts for fun and profit. If
you have friends and relatives interested in museums, nature magazines, zoos, public
radio and the like, you can sign them up for memberships that will be pleasurable
for them and tax deductible for you.
-- Save for next year. Bank-sponsored Christmas Club accounts are usually not a great idea, but there's no rule that says you can't
create your own. Choose a bank account or money market fund and authorize it to
pull a set amount from your checking account every month. Next year, you can pull
out the cash and shop till you drop without having a January hangover.
Enjoy!
