Recent Circuit City bankruptcy filing is leaving consumers nervous about buying gift cards as presents this year

I don't know about you, but in past years I have migrated more toward giving gift cards as gifts, particularly to younger family members. In the past, I have confidently bought gift cards as birthday or Christmas presents with nary a worry about the chance that the card issuer would go under. In today's current economic climate, I am not alone in my wary mindset. With Circuit City's recent bankruptcy filing hitting the news, people are starting to wonder if buying a gift card as a Christmas present this year is a good idea or not. Gift card holders, by the way, are considered creditors in bankruptcy proceedings and let's just say the pecking order when it comes to getting paid is pretty far down the list.

That being said, I did find an interesting article that discusses this subject more fully. And a week or so ago, I wrote an article naming at least 3 gift cards to avoid buying for Christmas presents. I do think Circuit City did get approval to honor gift cards from the bankruptcy court, but really folks, if I had one in my wallet right now, I'd go spend it. Though some companies do emerge from bankruptcy (think Kmart) some just don't.

So, my advice is to either buy local cards (grocery stores, gas stations, etc.) or give cash. Other than that, do a Google search to see if the card issuer is closing stores or in bankruptcy.