Charity Gift Card Gotchas

The holiday season is a time of giving to loved ones and often to charities. There's a new way to give to both-a charity gift card. But Consumer Reports Money Adviser has a caution.

Tired of fighting the crowds at the mall...or poring over catalogs only to spend too much on a gift basket or give a present no one ever uses?

Years ago Neil Bogan and his family decided to focus more on giving to charities instead.

"You know, it just creates a little bit different sense of the holidays. Maybe a little bit more relaxed, maybe a little more from the heart." said Neil Borgan.

Neil gives directly to the charities his family and friends prefer.

That's a smart money move according to Consumer Reports Money Adviser-far better than giving the charity gift cards that are becoming more widespread.

"Here's how the cards work: You buy one from a charity network for as little as $10. Then the person you give it to can donate that money to the charity of their choice on the network's list." said Consumer Reports Greg Daugherty.

But Consumer Reports warns there are catches with these cards.

They are generally non-refundable. Most charge fees just to buy the card.

A $10 card has a $5 fee. And the charity networks Consumer Reports checked out deduct 3-15% for administrative and other costs.

"Another problem is that many of these cards expire usually within a year. And any money that hasn't been donated just goes to the non-profit that sold you the card." said Daugherty.

Writing a check, as Neil Bogan does, is best says Consumer Reports.

He likes to give directly to poor farmers overseas.

"And it feels good, you know, to give a tree, to give a cow. It's a lot of fun actually." said Bogan.

Bogan feels so strongly about giving to charities, he works with his church to help others do the sames.

Consumer Reports says if you're wondering whether a charity is a good one, there are several organizations that rate them.

They are,, and the Better Business Bureau.

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