4 Reasons to Give Your Loved Ones Cash Over Gift Cards This Christmas

At this point, many people have begun their Christmas shopping. And in the course of making your list, you may decide to give some of your loved ones gift cards.

Gift cards have long been a popular option during Christmas and other holidays, and many people prefer them to cash because they at least come with somewhat of a personal touch. If you buy your sister-in-law a gift card to her favorite spa, for example, it shows that you put some thought into that present. If you hand her $100 in an envelope, it might send a different message.

But while it's easy to see why you may be inclined to fall back on gift cards this holiday season, cash is probably your better bet. Here's why.

1. Cash has no expiration date

Some gift cards come with an expiration date that limits recipients' ability to use them. Granted, this is less likely among cards from major retailers, but it's still an issue you might encounter. And while it's nice to support small businesses, you may be more likely to run into this problem if you buy someone you know a gift card for a local shop.

Cash, on the other hand, never expires. Your loved ones could stick that money in the bank and use it whenever they please.

2. Cash can't go out of business

When you buy someone a gift card, there's the risk that the issuer in question will end up going out of business before that gift card is spent. Granted, if you're buying someone a Target gift card, that's not a very likely near-term occurrence. But it's an eventual risk you take. And it may be an even bigger risk if you buy a gift card to a small business. With cash, this issue is non-existent.

3. Cash can be used anywhere

A Target gift card can only be used to make purchases at Target. The upside of giving cash as a Christmas gift is that your recipients can spend that money anywhere they like.

Maybe your niece doesn't happen to want anything from Target, but she's saving up to buy a specific pair of boots at a local shop. If you hand her $50 in an envelope instead of $50 in Target cash, it gives her the opportunity to buy something she really wants.

4. Cash can give your loved ones peace of mind

Giving your loved ones the gift of being able to repair a car might seem not so holiday-like. But actually, there's really nothing more valuable than giving a gift that allows someone you love to cover emergency expenses and alleviate some stress.

A recent SecureSave survey found that 63% of Americans don't have enough cash reserves on hand to cover an unplanned $500 expense. You never know if a loved one of yours has no cash in their savings account and really needs money to pay bills or get some breathing room.

Another way to think about it is this. Let's say you have a struggling family member with no emergency fund who desperately needs a new water heater for their home. What do you think they're going to appreciate more -- a $50 sweater or $50 in cash?

You might assume that cash comes across as a thoughtless Christmas gift. But that's far from true. Chances are, if you give the gift of cash this year, your loved ones will appreciate it more than you know.