Wednesday, December 8, 2010

Suggestions For Using Gift Cards: Make Them Pay You Twice

Let's say you go on the web, and manage to score a fraud-free discounted gift card. Why not use it to purchase an APPRECIATING ASSET, or something you can also write off on your taxes?

Let's say, for example, that you find a discounted Office Max/Depot card (pick one) or a Best Buy card, and you happen to run a business from home. Not only have you saved the amount of the discount, but you can also write the whole expense off as a business deduction when you buy something for your business. Free computer, anyone?

Or even this possible scenario: Let's say you managed to score a fraud-free discounted Visa or Mastercard--you could take that card to a brokerage house, open an account with it, and buy shares of stock (for you or the kids). Counting appreciation and dividends--free stock, anyone?

To save commissions and fees, you could even buy stocks directly from companies who offer them to the public (DRIPs and DSPs). MORE free stock, anyone?

It may also be possible to purchase a discounted card with enough money on it to pay for the down payment (or just closing costs) on a foreclosed home (before or after price negotiation), then write it off on your taxes. Free house, anyone?

Pay down (or off) your credit card debt (with or without balance negotiation) with a discounted Visa or Mastercard gift card. Debt free, anyone?

Days ago, Mr. Tightwad suggested saving on your taxes by making your January mortgage payment in December. Make it with your discounted Visa or Mastercard AND write it off on your taxes.

What else do you write off on your taxes--medical bills? Dental expenses? Company car stuff? Job-hunting expenses? Special work clothes or work equipment, such as safety glasses or steel-toed boots? Rental home equipment or supplies? Client lunches or entertainment expenses? Pay for them with discounted Visa or Mastercard gift cards. Free write-offs, anyone?

As for DEPRECIATING assets, negotiate their costs down as far as you can, then pay for them with discounted Visas or Mastercards--the negotiation plus the card discount will pay you twice!

Travel becomes even more discounted than it may be right now--cruises can also be paid for with discounted cards, making them even more cheap than before. Same goes for air fare--find a cheap flight, pay for it with a discounted gift card, making it even cheaper. Hotels? Same deal--find a cheap room, pay with a discounted gift card.

They aren't just for Christmas shopping any more! Imagine what you could do with it at the grocery store--buy loss leaders by the truckload, getting paid once by the card discount, and once by the store sale. If you stack in-store sales with coupons, rebates, or BOGOs (and whatever other tricks they use), plus that discounted gift card, guess what? You just outdid any coupon queen alive. Buy stuff at the lowest price per unit you can find, and pay for it with that discounted card, and you've even outdone ME.

Then there's thrift stores--the store heavy discount, followed by the card discount. If you end up donating your card-purchased item, that's a three-some for you (counting the tax write-off for charitable donations). Free stuff, anyone?

The list is endless, providing security can be tightened on the cards themselves.

Discounted Visa and Mastercard gift cards are accepted anywhere regular credit cards are accepted, so look at your bank, brokerage, travel agency, car dealership, real estate agent, and even Uncle Sam in a whole new light.

Gift cards may be on their way to becoming the new coupon. If they're bought using money from collected cans, sperm donation, blood donation, scrap metal collecting, or other "no job" income, then your discounted gift card purchases are REALLY AND TOTALLY free.

UPDATE: While this move won't pay you back, it will make you pay less: use a discounted gift card at the after-Christmas discount sales. Need something big and pricey, like a riding mower, washer/dryer set, outdoor gas grill, or maybe a new car? Take advantage of the markdowns, then add your own markdown in the form of a discounted gift card.

UPDATE 2: Instead of buying things with your discounted gift card, why not donate it to charity and take the charitable contribution deduction?


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