I was interviewed by the Associated Press about gift cards the other day and my opinion on them. To be quite honest, I think they’re a terrible gift from a personal finance perspective, but I do understand why some people use them. It’s kind of like a convenience store. It’s not a place that I want to buy my items on a regular basis, but sometimes I do buy stuff there.

If you don’t know what to give as a gift, creatively giving money is a much better option or just sending a check. The problem I have with gift cards is that if they are bank based gift cards, they come with a lot of fees that can significantly reduce the amount you are giving and Mall Gift Cards are usually not much better. While store brand gift cards usually don’t have the excessive fees, you limit the choices the person has to that particular store and give the store a free loan of your money.

I guess the way I look at it is that if I am giving a monetary gift of my hard earned money, I’d like the entire amount to go to that person and not have bits and pieces taken away for fees or other things. I also assume that the person receiving the money would rather have $20 in their pocket rather than $15 and a plastic card.