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With the clock reading 11:20am, we didn’t have much time to get a present for the birthday party Tori was invited to at 1:00pm. Scrambling, we asked our daughter what her friend might enjoy receiving as a gift, but unfortunately she couldn’t come up with much. The one good idea she did give us was a gift card to a popular clothing store for kids, but we didn’t have the time to go to the mall to get it. Vonnie suggested getting the birthday girl a Visa gift card that could be spent practically anywhere, further stating we could even get a gold one since it was her golden birthday.
As soon as the words hit my ears, I felt uncomfortable with this idea.
Struggling to find the right way for us to manage our finances over the last few years, one thing that has consistently produced good results is living a “pay with cash” lifestyle. Every card enrolled in our debt management program has been closed as per the terms of the program. We no longer carry the cards for the lines of credit that do remain open to prevent us from giving into the temptation of an impulsive purchase. We have an envelope that contains our cash for the current two week period from which we remove the budgeted amount when we go on a planned shopping trip. We’ve found that it’s too easy to just swipe a card (even if it’s a debit card), and forget that we went over budget for that expenditure. By the time we get back to reconciling the checking account the damage has been done and we have to scramble to fix our budget.
Given this is how we are living, and the problems that we have had with using credit cards, I questioned whether this gift idea was a good one. I looked at the situation from two perspectives:
One one hand, giving a child a Visa gift card could teach or validate the behavior that swiping a card is all that needs to be done to make a purchase. This is a behavior that has gotten Vonnie and I in a lot of trouble over the years. I would much rather put forth the example of spending “cash in hand.” You can count the dollar bills in your hand. You can see it, touch it and feel it.
On the other hand, this could be used as a learning opportunity. Not everyone has the self-control issues that we have. For some gift cards bearing the name of a major credit card, the holder can go online and see the remaining balance, as well as the purchases made with the card. It could be a great way to teach a child how to manage money using an account.
After some thought, we decided to simply put cash in the birthday card. Given the troubles we’ve had with our finances, and how we’re trying to live now, it just seemed like the right choice.
What would you have done? What would you do if your child received a Visa gift card as a gift?
Hmm, I’d have wanted to do the cash as well. Maybe her parents want her to save some of the money so it would be easier this way. Plus, cash is more real to me than a plastic bit that I swipe. But like you said, they might be more will powered than I so it could be a learning experience.
Oh, great point, bogofdebt. Birthday girl can’t “withdraw” money from the Giftcard! LOVE your thinking!
I think cash is a much better choice. Often those Visa gift cards have fees, so the recipient doesn’t even get the full amount. Unless you are trying to make an object lesson of it (tee hee), go with cash.
I saw your comment earlier and did some calling around. Typically the one’s that have the advanced features like being “reloadable” or being able to check the “account activities” online do indeed have a purchase price – usually about $5. RIPOFF! I’d rather give the extra $5 to the birthday girl…or reduce the price of the gift.
Thanks for your thoughts!
Gift cards are nice since you can use them online, also their more like debit cards rather than credit cards anyways. However, Petunia 100 does bring up a good point about fees. If the gift card is going to be used in person anyways, might well just go for the cash.
Such great points in the comments today…..things I didn’t think of for sure! I agree that it being able to use online would be an added benefit….but for a 10 year old (age of birthday girl), I’d be that she’d be able to get around that with her parent’s help.
Thanks for your comment, Kevin!
I think cash is the better choice! As a parent I did have my children put some of the cash they received into a savings account, hoping to teach them to do the same when they would start receiving paychecks.
Swiping a gift card is too close to swiping a credit card. Like you I use cash for spending as it is too easy to not keep track of how much you have spent when you use a debit card.
We definitely think alike, Monica – it’s like we’re both on a similar journey to be debt free or something. LOL.
Cash is best choice and you’ll be keeping money away from Visa to sucker others into debt.
BEST. EFFING. COMMENT. EVER!