GREENSBORO – The ailing economy may have an impact on one of the most popular gifts this holiday season – gift cards.

During the last holiday season, experts said shoppers spent $26 billion on gift cards. But bankruptcies and closings could put the money consumers are planning to spend on their perfect gifts in jeopardy.

Even large and popular stores are feeling the crunch. Circuit City filed Chapter 11 bankruptcy Monday. And home goods store Linens-N-Things is shutting down all 371 of its locations after also filing bankruptcy.

A spokesperson with Circuit City said Thursday that the company got authority from the court to continue its gift card program, because it filed Chapter 11 and plans to stay open.

A representative of Linens-N-Things said the company is honoring gift cards that have already been purchased.

But it's a different story for stores filing Chapter 7 bankruptcy, which close for good after liquidation.

"Customers are at the bottom of that list of creditors," Better Business Bureau President Pauline Morrison said. "Receiving any sort of compensation, you have a very slim chance there."

So Morrison said if consumers don't have cash, they're better off using credit this holiday.

"Because then they do have the opportunity to dispute the charge if the company goes out of business," Morrison said.

She adds to watch out for prepaid debit cards. While they may be a good replacement for gift cards, if the bank fails, she says the FDIC may not insure the amount on that card.

Better Business Bureau officials said if shoppers decide to purchase gift cards this year, or use them to buy Christmas gifts, she advises people to know the terms of the card. That includes knowing the expiration for the card and whether there are any fees for using it.