Money Management

Costco sells gift cards. But read on to see why you may not have success buying yours there. 

Many people flock to Costco to load up on low-cost groceries and household essentials. But the warehouse club giant sells a lot more than just bulk breakfast cereal and paper towels.

You can find everything from apparel to electronics to furniture at Costco. And it could also be a good source for buying gift cards.

That said, Costco’s gift card offerings may not meet your needs. So it’s important to be mindful of these points if you’re looking to purchase gift cards at Costco.

1. Event gift cards might come with restrictions

Costco sells gift cards to different events. Right now, for example, you can buy gift cards to cover tickets to NASCAR races and NCAA games. And in the summer months, you can often find tickets to Major League Baseball games.

But when you buy event gift cards, you’re often limited to specific dates. And those may not align well with your schedule. Always read the fine print before buying a Costco gift card that you’re going to redeem for event tickets.

2. The selection may be limited

The selection of gift cards you’ll find at Costco can be hit or miss, depending on your local store. If there’s a specific gift card you’re looking for, don’t bank on getting it at Costco — even if you’ve seen it there before. You may have better luck at your local pharmacy or supermarket.

That said, you’ll generally find more options for gift cards on Costco.com than in stores. And in many cases, when you buy your gift card online, you’ll get it emailed to you so you have access to it right away.

3. You may not find the denomination you want

One major benefit of buying gift cards at Costco is that you’ll often find them priced below face value. For example, you might spend less than $100 for $100 worth of gift cards to a certain restaurant. But one hiccup you might run into is struggling to find a gift card in the exact denomination you want.

Let’s say you want to give your child’s teacher a $35 gift card to IHOP during the holidays. Costco sells a four-pack of $25 IHOP gift cards for $79.99, which is a great deal since that would normally cost you $100. But it also leaves you in a jam if you want to give a $35 gift card and you don’t want to go under or over.

A $25 gift card may not be enough for that teacher and a friend or partner to share a meal. But $50 (two $25 gift cards) may be more than what you’re looking to spend.

Buying your gift cards at Costco could result in a lot of savings. But before you gear up to buy gift cards at Costco, be mindful of these potential issues. Also, have a back-up plan if you’re buying a gift card to hand over as an immediate gift. That way, you’re not left in the lurch.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Maurie Backman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Costco Wholesale. The Motley Fool has a disclosure policy.

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Poverty rates are on the rise. Will an important tax credit come back to help? 

In 2021, the pandemic was still raging and causing a world of economic upheaval. Lawmakers acted by passing the Americans Rescue Plan, which included, among other benefits, a round of $1,400 stimulus checks and a major boost to the Child Tax Credit.

The Child Tax Credit currently has a maximum value of $2,000 per child. In 2021, however, its maximum value increased to $3,600 per child under age 6 and $3,000 for children aged 6 to 17. And that amount of tax savings did a world of good for struggling Americans.

Just as importantly, half of the boosted Child Tax Credit was sent in installment payments that hit recipients’ bank accounts during the year. Normally, anyone entitled to a tax credit needs to wait until they submit a tax return to claim it.

Now, some lawmakers are still pushing to bring the boosted Child Tax Credit back. And given the way poverty rates have risen since the boosted credit expired, there’s a strong case for doing so.

Americans are doing worse on a whole

Between 2021 and 2022, the official poverty rate of 11.5% did not really change, says the U.S. Census Bureau. However, the Supplemental Poverty Measure (SPM) rate was 12.4% in 2022, an increase of 4.6 percentage points from 2021. That was also the first increase in the overall SPM poverty rate since 2010.

What’s more, it’s clear that this increase came as a result of changes to federal tax policy, including the expiration of the enhanced Child Tax Credit. So it’s easy to see why lawmakers are eager to bring the boosted credit back.

However, there’s still debate as to how exactly the credit will work. Some lawmakers, for example, want to implement a work or earnings-related requirement as part of a reintroduced Child Tax Credit. But those opposed to that requirement argue that imposing it would likely take the boosted credit away from the people who need that extra money the most.

What’s next for the Child Tax Credit?

The absence of the boosted Child Tax Credit most likely wasn’t the only factor that impacted poverty rates in 2022. Inflation may have played a role, too.

But all told, it’s clear that Americans’ financial situations took a hit once the boosted Child Tax Credit went away. Bringing it back could not only pull many families out of poverty, but also help shore up the finances of those who are above the poverty line — but barely.

It’s likely that lawmakers will continue to debate the specifics of the boosted version of the credit until they reach a consensus everyone can get on board with. But for the sake of struggling Americans, let’s hope that happens soon.

In the meantime, you should know that the regular Child Tax Credit is still alive and well with a maximum $2,000 value per child. If you have dependents, you should gear up to claim it on your 2024 tax return.

You should also know that there’s another tax credit that could be useful to you if you pay for childcare expenses. It’s called the Child and Dependent Care Credit, and it allows you to deduct a certain portion of your childcare costs, the exact amount of which depends on what you spend and what your income entails.

The Child and Dependent Care Credit also got a boost in 2021. At this point, that boost is unlikely to come back, though. Lawmakers are more focused on fighting for a permanent enhancement to the Child Tax Credit since it has a broader reach.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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