Use Your Gift Cards Now

August 28, 2019

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Birthdays, Christmas and even thank yous sometimes come with gift cards. Chances are they're all sitting in a drawer somewhere in your home not being used.  One financial blogger is on a quest for all of us to cash in on gift cards as soon as you get them.  The reason is simple, you are providing the company with an interest-free loan. How much? Starbucks has around $1.6 billion in stored value card liabilities outstanding. That is a lot of unused gift cards and accounts to around 6% of the company's liabilities. While unused gift cards allow you to shop for products whenever you want without cracking out your debit/credit card, it is essentially a free loan and providing the company with free debt. Even worse is leaving a balance of a few cents on a gift card.  While it may not seem a lot to you, add up all the spare change on gift cards and we forgive debt of the store! In short: use your gift cards as soon as you get them, just like you’d use your credit card rewards or airline miles as soon as you earn them. (You do use your credit card rewards and airline miles as soon as you earn them, right?) Otherwise, you’re hanging on to an interest-free IOU with an expiration date—and that’s the kind of loan you want to call in as quickly as possible.

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SOURCE: Lifehacker

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