Gift Card

A gift card is basically a prepaid credit card. Many times, they can only be used for purchases at specific retailers, like Home Depot or Olive Garden, but there are also gift cards that can be used for purchases anywhere, like a Visa gift card.

Retailers love gift cards because consumers tend to spend more money when they have them. Think about it: if the item we want is $70, and we have a $50 gift card, then we’re really only spending $20 of our own money for that item. But the retailer is still collecting $70, since the $50 for the gift card was already spent.