When you download an in-the-hoop gift card holder design, you will find multiple files. Some are the embroidery files, and the others are dieline files marked with the letters "DL". Dielines are used to cut the fabric to the correct shape and size. Open and print each dieline file using an embroidery software. If you do not have an embroidery software, take a look at our helpful video on using dielines.

Spray a piece of medium-weight cutaway stabilizer with temporary adhesive.

Place the fabric on top. This example uses craft felt.

Place the dieline for the front of the holder on top of the felt and stabilizer combination.

Cut out the shape for the front fabric piece.

Next, cut the fabric for the inside of the gift card holder. In this example, quilter's cotton is used. Place the dieline for the front on top of the cotton, and cut out the shape.

Finally, prepare the fabric for the back of the gift card holder. Quilter's cotton is used again. Spray the wrong side of the cotton with temporary adhesive.

Fold the fabric in half.

Place the dieline for the back of the gift card holder on the fabric. Align the straight edge of the dieline with the folded edge of the fabric.

Cut out the shape

Now that the fabric pieces are cut to the proper shape and size, it's time to embroider the design. Hoop a piece of tear-away stabilizer.

Use a size 11 sharp sewing needle in the machine rather than an embroidery needle. A sharp sewing needle is the best choice when embroidering in-the-hoop designs.

Load the full embroidery file (not a dieline file) to your embroidery machine. Attach the hoop, and begin embroidering the design.

Reference the color change sheet for the design as you stitch. That sheet tells you what is stitched in each step. CC1 is a dieline, or outline stitch, that traces the shape for the front fabric piece.

After that dieline (outline) has sewn, spray the back of the felt and stabilizer piece with temporary adhesive.

Place that inside the sewn dieline.

Continue embroidering the design. The next thing to stitch is a tack down or zigzag stitch. This binds the fabric to the stabilizer.

Other elements of the design will stitch, such as the gifts and ribbon on this design.

Reference the color change sheet as you stitch. When you get to the section that says "back piece tack down," stop the machine before embroidering this step.

Remove the hoop from the machine and turn it over.

Spray the back of the inside fabric piece with temporary adhesive.

Place that on the back of the stabilizer, right inside the sewn shape.

Spray the corners of the back side of the back fabric piece with temporary adhesive.

Place that piece on the back of the embroidery. The bottom edge should line up with the bottom edge of the card holder; the folded edge should be on top, near the point.

The remaining steps will be seen from both sides of the holder. Wind a bobbin with the same thread used in the top.

Attach the hoop to the machine and continue embroidering the design. The remaining steps are tack down stitches, which bind the three layers together, and a satin stitch finish.

After the design has finished, unhoop the stabilizer and gently tear the excess away.

Use strips of self-adhesive Velcro to make a closure.

Or, cut two 4" strips of 1/4" wide ribbon. Tie knots on one end of each strip. Thread the ribbon through a tapestry needle and sew one strip of ribbon to the point on on the holder.

Sew the other strip where the point meets the back.

Tie the two together to make a bow.

To add a hanger, cut a 6" length of ribbon. Tie a knot on one end. Thread the ribbon through a tapestry needle and sew the ribbon through the top of the holder, about 1/2" from each top corner. Tie a knot to the other end of the ribbon to secure it in place.

Not only are these gift card holders a festive way to give your friends and family a heartfelt Christmas present, but they're the perfect size to hang on the tree, too!