Gas is something everyone has to buy, and there’s usually not much difference between the gas at one station over another, price is the prime competing factor between retailers.
Although there are some drawbacks to paying for gasoline with a credit card, there are enough perks and rewards to make purchasing with a credit card worthwhile. Store cards are usually the easiest to get. Co-branded cards that partner with American Express, Visa, or MasterCard often have the lowest interest rates and offer the best rewards. These cards can only be used to purchase one brand of fuel, whereas some credit cards offered by the major card issuers can be used at any gas station.
Some examples of co-branded cards are BP Visa, which has a 5% rebate on up to $500 in monthly purchases at participating BP locations.
Chevron and Texaco Visa offers fuel credits of 10 cents per gallon at their gas stations, up to $300 annually. Likewise, ExxonMobil MasterCard has a 15-cent rebate per gallon of gas at ExxonMobile stations.
Gulf, Hess, Holiday, Phillips66, Quik Trip, Shell, Sinclair, Speedway, Sunoco and Valero all offer similar deals. The interest rate on these cards varies from as low as 14.99% at Gulf to as high as 26.99% at Chevron and Texaco.
Conversely, Discover More Open Road Card offers 2 % cash back on the first $250 of gas purchases with an interest rate of 10.99% to 19.19%.
Premier Rewards Gold Card from American Express offers 2 points per dollar spent on gas, but the balance must be paid off each month, so there is no interest.
And Visa Platinum Cash Rewards Card gives 5% cash back on gas purchases at the pump with only 9.99% interest.
Blue Cash Everyday and Blue Cash Preferred from American Express offer 2-and-3% cash back respectively at gas station, but their interest rate is higher at 17.24% – 22.24%.
Some cards run monthly or quarterly specials, which may be announced online or in monthly billing statements.
Since most gas stations charge the same price whether or not a credit card is used, the use of a card with a good discount is a real money-saver. Less tangible savings can be realized by paying at the pump with a credit card. For one thing, it one doesn’t go inside, they don’t succumb to impulsive merchandise purchases, which can add significantly to the gas “expenses.”
Paying off the balance of your card each month is also very important, since paying interest counteracts any savings you receive.
Using the right card at the gas pump can be a major cost-saver, but because of these widespread differences in rewards and interest cost, a person would want to look at all the variables before deciding which card best suits them.
In comparison with cash discounts, the hidden benefits of paying with a credit card will usually outweigh the advantage of paying with cash.