Why Gas Station Credit Cards Should Be Avoided
With the price of gasoline remaining higher than anyone really wants to pay, it can be tempting to get a gas station credit card which offers rewards just for filling up your gas tank. Why wouldn’t you want to save some money for buying gas – something you have to buy anyway? The theory is good – being rewarded for a purchase you can’t avoid making – but there are some problems with gas credit cards that make them less useful than you might think. Consequently, even the best credit cards tied to specific gas stations pale in comparison to mediocre credit card offers.
Here is why you shouldn’t get a gas station credit card:
Most gas station credit cards will only offer good rewards when you get gas at a specific gas station. This means every time you have to fill up at a different gas station, you lose your chance to get rewards or get much lower rewards for the purchase. Additionally, a large number of gas station credit cards are not part of the Visa or MasterCard network and can only be used at the gas station you got the card. This makes them utterly useless if you need a general purpose credit card.
Perhaps most importantly, the majority of gas station credit cards charge interest rates of 20% or more – which means if you don’t pay off your balance in full each month before the due date, you end up paying much more for your gasoline than you earn in cash back rewards! And forget about getting a 0% APR credit card from a gas station. The relentlessly high interest rates attached to these cards start the moment you fail to pay your bill in full.
How to Use Credit Cards to Save Money on Gas
While a gas station credit card is probably not the answer for saving money at the pump – there are ways you can make a credit card work in your favor. Instead of a specific gas station card – look for a regular cash back credit card, like Chase Freedom or Capital One No Hassle Cash Rewards. These cash back credit cards offer more reasonable interest rates, can be used every where credit cards are accepted, and allow you to earn a percentage of cash back from every purchase you make – not just when you put gas in your tank.
As with any rewards credit card, to really benefit from the rewards you earn you must be diligent in making your payments on time each month before the due date. This allows you to avoid paying interest on your balance as well as late fees. The best savings are earned by people who pay their credit card bill in full each month, rather than carry a balance from month to month.
