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Gas is a huge expense for most Americans, and as gas prices rise, it’s only increasing. This may make you want a credit card that offers rewards for fuel purchases. Yet you might be surprised to learn that a gas credit card isn’t actually the best method to save money on gas.
Although gas cards may sound like the best way for frequent commuters to save money, that’s not the case. Their disadvantages make it needless to own when you can earn even more benefits and rewards through a traditional rewards card.
Gas cards have been dwindling in popularity, according to NerdWallet, especially compared to general-purpose cards, which are considered more flexible. From their outrageous interest rates to their lack of bonuses, gas cards are rarely worth applying for.
Gas cards offer little savings
Let’s say a family that drives often gets the BP Visa card, a typical card. It offers a discount of 10 cents per gallon. As of this writing, AAA reports that the average price per gallon is $4.17. So, the 10-cent discount is really worth just 2.4 percent of your purchase. And as you’ll see, general-purpose rewards cards can offer better savings, even at the gas pump.
Gas cards have high APRs
Creditcards.com recently conducted a survey of 28 of the largest major-brand gas cards — and found that their disadvantages are legion.
The gas cards surveyed had an average APR of 23.61 percent, far above that of general rewards cards, which stands at about 16.62 percent according to the weekly rate report on Creditcards.com.
The survey resulted in a four-way tie for the highest APR at 26.99 percent. And remember that BP Visa card? Its APR is a whopping 29.99 percent.
These APRs go hand-in-hand with gas cards’ high acceptance rates. So, if you’re struggling to get accepted for a traditional card, a gas card may be a valid option, but only if you avoid interest charges by paying your statement balance in full every month.
Gas cards have confusing policies and low bonuses
Creditcards.com also found that gas cards offered sub-standard sign-up bonuses, and their rewards were filled with confusing terms and limitations such as minimum spending thresholds, maximum limits, qualified purchase requirements, and tiered rewards levels.
Here are some of the survey’s findings…
- 6 cards required purchasing 45 gallons before you can earn rewards
- 6 cards set a maximum limit that you can earn (one’s policy caps your rewards at $99 per year)
- Most cards automatically applied rewards, instead of allowing cardholders to decide whether to keep saving
These specific restrictions aren’t always made clear to the cardholder — who may think they’re earning more rewards than they really are.
Of the 28 cards CreditCards.com analyzed, only one — Speedway’s Speedy Rewards MasterCard — offered any bonus offers.
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Alternatives to gas cards
All of the advantages of a gas card are outweighed by the disadvantages. But you can find even better deals with other general rewards cards. Some will offer generous discounts on gas, while also giving you rewards on other purchases, and they aren’t even from gas retailers.
This card from Pentagon Federal Credit Union offers 5x points on gas paid at the pup as well as for purchases from EV charging stations.
What’s even better, the APR is way lower than your average gas card — as low as 13.49 percent APR. That rate can go up to 17.99 percent based on your credit. There’s no annual fee for this card.
2. American Express Blue Cash Preferred
This card offers 3 percent cash back at U.S. gas stations and on transit (including taxis/rideshare, parking, tolls, trains, buses, and more), 6 percent cash back on select U.S. streaming subscriptions, 6 percent cash back at U.S. supermarkets on up to $6,000 per year in purchases (then 1 percent), and 1 percent on all other purchases.
Earn $300 back after you spend $3,000 in purchases on the card within the first 6 months of your membership. (Cash back received in the form of statement credits).
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This card also offers 12 months of 0% APR financing on new purchases. The interest rate after that is variable, based on your credit. In addition, you also receive a $0 intro annual fee for the first year (then $95).
This card offers an amazing 4 percent cash back on up to $7,000 of gas purchased each year. And unlike many credit cards, this bonus applies to gas purchased at Costco, which often has the lowest prices in the area. Just note that you receive your cash back each year in February as a rewards certificate that you can redeem at Costco for cash or merchandise. The standard interest rate is 15.24 percent and there’s no annual fee for this card with your paid Costco membership.
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