The Smartest Way to Use Gift Cards

Posted on February 15, 2018February 13, 2018 by Amber Murakami-Fester

If you received a gift card over the holidays, chances are you’re happy about it. After all, what’s not to like? Gift cards allow recipients to buy stuff without taking money out of their pocket — at least in theory.

But gift cards can be a mixed blessing. Forget you have one and it can sit in your drawer, unused, for ages. Receive one for a store you don’t care for and you may find yourself buying things you’d really rather not. Or maybe you’ll overspend and find yourself using that $20 Pottery Barn gift card for a $50 lampshade you don’t really need.

Here are ways to make sure your gift cards stay a blessing — not a curse.

Spend it sooner rather than later

If you intend to use your gift card, it’s better to act fast. Stores may go out of business, may not honor outstanding gift cards after filing for bankruptcy or may close their only location near you.

That’s especially true as consumer shopping patterns continue to shift and brick-and-mortar retailers shut their doors — 2017 saw retail giants including J.C. Penney and Macy’s announce the closure of stores nationwide.

And the quicker you use a gift card, the less likely you are to forget about it. Nearly $1 billion in gift cards went unused in 2015, according to consulting company CEB Tower. That’s a significant sum of money left on the table.

Don’t want to spend? Regift, resell or donate

If you receive a gift card for a store with no nearby location, or one that you simply have no interest in visiting, you can get rid of the card by regifting, reselling or donating.

“It’s important to do an honest assessment right from the beginning and think, ‘Am I really going to use this or is this a stretch?’” says Shelley Hunter, spokeswoman for Giftcards.com, a website that sells gift cards.

Find a friend or family member who will appreciate your unwanted present. And if you can’t, sell it to somebody else. Sites like Raise.com or Cardpool.com allow users to resell gift cards online. Though you likely won’t get the full value of the card back — the cash you get can range from 60% to more than 90% of the original amount — Hunter says it’ll be worth it if you weren’t going to spend it anyway. You’re likely to get closer to the full value for stores that have nationwide footprints and sell a wide variety of merchandise, such as Target or Walmart, Hunter says.

Or consider donating your gift card to a local school, after-school program or homeless shelter.

Donations may be eligible to use as a tax deduction.

Avoid overspending — and underspending

A study by payments technology company First Data found that 75% of consumers overspend the value of their gift card by an average of $38. That’s not necessarily a bad thing — a gift card can bring down the amount you spend on something you wanted but couldn’t afford otherwise.

Beware of “gift card creep,” however — spending excessively on something you didn’t really want, just because the card makes it relatively affordable. Plan ahead of time, and ask yourself whether you truly value the item. To get the best deal, you should also look around for coupons and shop when the retailer is having a promotion.

What if you’ve come close to your gift card limit and have a small amount left on your card? Certain states require retailers to exchange the value of the card for cash if it falls below a threshold. Though the threshold is $5 for many states that follow this policy, it ranges from $1 in Vermont and Rhode Island to $10 in California. Some stores may also have policies in place to refund low values for cash, regardless of which state they’re in.

Try new things

Gift cards can be a burden if you feel forced to spend money on things you won’t ever use. But they can also push you to try new things.

“You’re not giving a gift, you’re giving the gift of an experience,” Hunter says of presenting somebody with the store vouchers. So go out on a limb — try that new local restaurant, take the cooking class or browse through that clothing store you’ve been meaning to check out. You might find that your gift card brings more value to you than its worth in dollars and cents.

The article The Smartest Way to Use Gift Cards originally appeared on NerdWallet.

Image by Joana Lopes via 123 RF

Want to Save Money Without Thinking? Try These Apps

Posted on March 7, 2017February 14, 2017 by Amber Murakami-Fester

Saving up for the future can be daunting. Whether you’ve got your eyes on a tropical vacation or you’re stockpiling for your emergency fund, meeting your savings goals can seem out of reach unless you use a system that lets you save as painlessly as possible.

One good option is to turn to the new breed of mobile apps that helps you build up your savings. Plenty of personal finance apps include some savings functions, but these three apps are specifically focused on helping you fill your piggy bank little by little, in ways you’ll barely notice.

Qapital

Best for the tech-savvy

Qapital lets you set up various “rules” to automate savings. For example, you can set up the app so that every time you use your debit or credit card, Qapital rounds the spare change up to the nearest dollar and moves the amount into a Qapital account insured by the Federal Deposit Insurance Corp.

Qapital also lets you automatically transfer funds into your account when you spend less than you budgeted for a certain expense or when you spend money on something you identified as a “guilty pleasure.” Or you can contribute a lump sum to your fund daily, weekly or monthly. The idea is that your money is moved automatically, so you’ll save up to your goals without constantly reminding yourself.

By linking Qapital to the “if-this-then-that” app Ifttt, you can add other rules that trigger savings — when you hit fitness goals, post a picture to Instagram or get your paycheck, for example.

If you need a little social pressure to hold yourself accountable for working toward your goals, Qapital lets friends and family track each other’s progress. Don’t worry, though — they won’t see what you spend your money on.

There are no fees for using Qapital. Be aware, though, that your account won’t earn interest like a traditional savings account. Withdrawing money will take two business days.

Acorns

Best for investment options

Like Qapital, Acorns rounds up your purchases to the nearest dollar and automatically tucks the difference away into an account. Unlike Qapital, Acorns is an investing platform. That means the money will be invested in a portfolio based on your income and goals, and you’ll reap the return on investment.

Each Acorns portfolio is composed of exchange-traded funds, with options that range from conservative, having a higher percentage of bonds, to aggressive, having a higher percentage of stocks. You’ll pay $1 a month if your balance is under $5,000; for anything above that, you’ll pay a fee of 0.25% of your account balance. College students can use the service for free for up to four years.

If you make purchases using a card linked to your Acorns account with one of the company’s partners, such as Hulu, Airbnb and Blue Apron, those companies give back a percentage of the purchase to your Acorns savings account.

Because your money is being invested, your savings may shrink if there’s a dip in the markets where you’ve allocated your money. Also, keep in mind that it can take several days to withdraw money from your account, because shares in the ETF you’re invested in must be sold first.

Digit

Best for fast withdrawal

Unlike Qapital and Acorns, Digit goes beyond squirreling away your spare change. It calculates what you can save by looking at your income and spending, and it puts that amount aside — typically $5 to $50 every two or three days — in an FDIC-insured Digit account.

Because the amount taken out of your checking account can vary, you’ll want to keep an eye on your balance to avoid an overdraft. Digit refunds up to two overdrafts, but you can set up a minimum balance that’ll stop Digit from drawing money out of your checking account if your balance dips below a designated amount.

Money in your Digit account won’t earn any interest. You can text Digit when you want to withdraw money, and you’ll have it the next business day.

If you have trouble saving up, getting an app that automatically does it for you can be a good first step. Getting yourself in the habit of regularly putting aside some money — and seeing your total grow — will get you on track to mapping a healthy budget.

Amber Murakami-Fester is a staff writer at NerdWallet, a personal finance website. Email: amufe@nerdwallet.com. Twitter: @iamyams.

The article Want to Save Money Without Thinking? Try These Apps originally appeared on NerdWallet.

How Two-Factor Authentication Protects Your Online Info

Posted on February 23, 2017February 2, 2017 by Amber Murakami-Fester

As the world goes fully digital, online information increasingly is under attack from scammers stealing people’s personal information. A security feature known as two-factor authentication can keep your accounts safer and provide peace of mind.

What is two-factor authentication?

Two-factor authentication, also known as multifactor authentication and often abbreviated as 2FA, adds an extra layer of security when you log in to an account that contains personal or sensitive information; for example, on banking or payment websites. Mobile phones are often used to add this extra layer.

Here’s how it typically works:

When you log in to an account that has been set up for two-factor authentication, you log in with your user name and password as usual. Then there’s an additional step: You get a text message on your phone or an email with a one-time code that you must enter to complete the login. So even if the bad guys get their hands on your password, they still wouldn’t have access to your account.

Two-factor authentication can also use biometric information like fingerprints or face authentication. And there are other forms of two-factor authentication, such as security tokens that produce temporary codes. The idea is that login requires both something you know, like a password, and something you have, like a phone.

You might be using this process already. Some banks automatically require an extra step of authentication when you log in to your account from a new device or location or try to make a high-volume transaction. Other financial service providers may require you to opt into it by adjusting your security settings.

In addition to financial services sites, two-factor authentication can be set up on shopping, social media, email, gaming and many other sites.

Theft of online info a growing problem

There’s no guarantee you won’t get hacked if you use two-factor authentication, but it’s less likely. Even if thieves have your password, they probably don’t have your phone.

The theft of online information is a big, and growing, problem. The Department of Justice estimates that 17.6 million Americans were victims of identity theft in 2014, and complaints to the Federal Trade Commission rose almost 70% from 2013 to 2015, to more than 490,000.

The Department of Homeland Security recommends that you place the strongest possible protections on your accounts, particularly if they hold sensitive information. That means for any account connected to your finances — banks and credit unions, peer-to-peer payment platforms like Venmo and anything that might hold credit or debit card information — the more secure, the better.

You can check online sites to find out if your financial institution offers 2FA. It’s also a good idea to go to your bank’s website or contact your bank directly, since information may change.

More security steps to take

If two-factor authentication isn’t available on a site, you can maximize your accounts’ safety by following these other security tips. It’s a good idea to follow these rules regardless of whether your financial institution offers 2FA.

Create passwords using a combination of upper and lowercase letters, numbers and symbols.
Avoid using the same password for multiple sites, particularly for bank accounts and other sites that hold sensitive information.
Don’t access sensitive sites while your device is connected to public Wi-Fi.
Run updates on your mobile devices and apps to ensure you have the most up-to-date browsers and software to keep viruses out.
Read the fine print. Be choosy about which apps and services you give your information to, and know how they will use your information.
Delete old apps and accounts you don’t use.

Amber Murakami-Fester is a staff writer at NerdWallet, a personal finance website. Email: amufe@nerdwallet.com.

The article How Two-Factor Authentication Protects Your Online Info originally appeared on NerdWallet.