by Joseph Kenny | 12/5/07

Financial experts this year are recommending that gift buyers proceed with caution when it comes to gift cards.

Gift cards have become incredibly popular in the marketplace for a variety of reasons.   For instance, the cards can be quite convenient for both the giver and the recipient.  They can save the giver many shopping hours, while they allow the recipient an opportunity to buy what they really want. 

You don't have to worry about a gift card not fitting or be concerned that it's the wrong color or style.  Therefore, some people believe that gift cards represent the perfect solution to all their shopping worries.

However, gift cards do come with some strings attached - conditions that many consumers might not be aware of.

For instance, a bank gift card may not be used for bills or car rentals.  They are also not accepted at some gas stations and at casinos.

Another important consideration is the fact that gift cards may have an expiration date, meaning you only have a small window of opportunity in which to use them.  In addition, there may be fees associated with them.

For instance, American Express gift cards come with a $2 service fee after a year and a $5.95 fee if the card is lost or stolen.  Discover gift cards tack on a $2.50 dormancy fee after a year.  The cards also expire after 2 years.

Conditions vary for Visa and MasterCard gift cards, so it's best if you check with your bank before buying.

Does all this mean you should avoid gift cards altogether?  Experts say:  not necessarily.

Gift cards can still be the best gift for some people - especially those who are hard to buy for.  The point is, though, you should do your research first before investing.  That way, you can ensure that you—and the person you love - are getting your money's worth.