Sending a digital gift card takes just moments, and most people genuinely enjoy receiving them. Gift cards, for these reasons, are great options for both the lazy and the thoughtful shopper.

In 2018, consumers will buy 6.3 digital gift cards, on average -- up from 6.1 in 2017, according to First Data's annual Prepaid Consumer Insights Study. Physical card purchases have climbed even higher -- going from 6.5 last year to eight in 2018. Gift cards can lead to behavior that's good for the companies selling them and far less great for consumers. Sometimes, giving someone a gift card can encourage them to make poor spending habits, or cause them to spend money they needed to save. 

A wrapped box the size of a gift card.

Gift cards can be dangerous when it comes to your budget. Image source: Getty Images.

It's a trap

If you were told to spend exactly $50 in a department store, how easy would it be?

If you have a $50 gift card, this is your predicament. If you spend less than the full amount, you must hang onto the card and keep track of your balance until you spend it at a later date. On the flip side, you rack up a balance at the register that exceeds the value of the gift card and you pull out your debit card or cash to cover the rest, lest you change your mind and interrupt the flow of the transaction and get embarassed.

This trap is in action! Consumers will spend an average of $59 above their gift card balance in 2018. That's up $21 from $38 in 2017, according to the survey of 2,000 U.S. consumers.

And, this isn't just a trap foisted on us by well-meaning relatives, friends, and co-workers. It's one we place ourselves in, as 64% of shoppers plan to buy themselves a gift card this year, up from 58% in 2017. In addition, gift cards lead to an added danger as one-third (33%) of respondents said they will spend more on a gift card than they would on a traditional gift.

What can you do?

If you have the time, give your loved ones more personalized and tangible gifts or gift them an experience, rather than add to their stack of gift cards that perpetuate these spending traps. But if you really can't think of anything else to gift all your random family members and friends, at least make sure you're giving gift cards that each recipient would use. There's no shame in asking someone a place your money would be well spent on them. In fact, that will nearly ensure they'll use your gift wisely and timely.

If you receive gift cards this holiday season (and you almost certainly will), you need to have a plan. Buy a necessity you would have otherwise paid for cash for, and then any spending over the amount of the gift card isn't a true waste.

If you plan to be more indulgent with your purchase, don't spend more than the value of the card (or at least close to it). And if you spend less than the full value,keep track of the balance. Remember to use it later on -- preferably for something you would have paid cash for.

You can also check out stores' websites, so you can comparison shop from the comfort of your own home, without the pressure of salespeople who can drive up the cost at the register with add ons and up sells.

Don't ever buy a gift card for yourself, no matter the promotion being marketed ($10 gift card for you when you buy Holiday Gift Card). This ties up your money so you can only use it at the one store. If you intend to do that, just take the cash you would have spent and set it aside for your next trip to that store. This way, if something goes wrong, your money isn't tied up in a gift card.

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