Suze Orman Has This Advice for Using Holiday Gift Cards

It pays to hear what she has to say.

At this point, a lot of us are adjusting to being back to reality after taking time off for the holidays. That means going back to full-time work, taking down Christmas lights, and taking inventory of gifts received.

If you exchanged gifts with a lot of people in your life, then chances are, at this point, you're sitting on a number of gift cards. And that's not necessarily a bad thing. 

In some cases, a gift card can be as valuable as cash. For example, let's say you shop at Target for essentials every single week. If you have $100 in Target gift cards following the holidays, that's basically the same as having been given $100 in cash, since you know you have a need for those gift cards.

But some of your other gift cards may not be as useful. And even the ones that are useful should be utilized carefully. With that in mind, financial guru Suze Orman has two great tips for making the most of the gift cards you're sitting on. 

1. Use your gift cards for needs, not wants

You may have your eye on some really cute home decor at Target. And if you're the proud holder of a $100 gift card, that gives you a perfect opportunity to buy those items without having to add to a credit card balance.

But if money is tight, then Orman says you should use your gift card for items that are needs -- things like groceries, cleaning supplies, and personal care products. And if you're thinking, "but the person who gave me this gift card would want me to spend it on something fun," think again.

Yes, that may be the case. But the person who gave you the gift card probably doesn't want to see you struggle financially or add to your debt. And so if you were to use that gift card to buy food to put on the table, and that were to somehow get back to the gift-giver at hand, chances are, it would go over just fine. 

Besides, it's not like gift cards come with tracking devices that allow those who give them to see what they're redeemed for. So if you were to buy yourself $100 worth of toilet paper with a Target gift card, the giver wouldn't end up any the wiser.

2. Trade in your gift cards for cash

A $100 Target gift card may be really useful for you. But if you have a $100 gift card to a restaurant you rarely eat at or don't particularly enjoy, then that's a different story. 

In that case, your best bet, says Orman, is to swap your gift card for cash. And there are different sites that allow you to do that, so a good idea is to do an internet search, get a list of options, and see which ones have the most appealing exchange rates.

One site, for example, might give you $80 for an unwanted $100 gift card, while another might give you $85. So in this case, the latter option is clearly the better one. Also, the amount of cash you're offered might hinge on the specific gift cards you're looking to sell, which is why it pays to do a lot of research. 

A final option worth considering

Orman's advice to use your gift cards for essentials and/or trade them in for cash is really great. But if you're in a good place financially, there's a third option to look at -- giving your gift cards to people who are less fortunate. 

Maybe a neighbor of yours lost their job a few months ago and has been struggling. Or maybe there's a single parent you're friends with who's perpetually strapped for cash. Giving your gift cards to people in need is a great way to pay it forward -- and show appreciation for the fact that your financial circumstances are very different.