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U R @: Education Center : Money Savers : Gas Credit Cards that Pay
GAS CREDIT CARDS THAT PAY
I recently asked a number of friends and family members what I thought was a simple question: How much do you spend on gas? Surprisingly, noone gave me a number for an answer, not even a ballpark figure. To my surprise, the most common answer was short and to the point: a lot. The second most common answer: I don’t want to know. My answer was the same. I knew that every time I filled my tank I thought back to the days when $10 moved the gas meter from empty to full. The last time I put $10 in my tank it didn’t even get the gas meter to move.
Unlike most of the people I questioned, however, I use a gas cash back credit card that gives me 5% cash back on all of my gas purchases. Gas credit cards that offer cashback are either directly tied to specific gas stations or are available for use at any gas station. I carry the Discover® Gas Cash Back credit card, which pays me 5% in rebates on all gas purchases at any gas station. Curious, I set out to calculate the amount this credit card would save me in 1 year. I wasn’t surprised to find out that the short answer was a lot.
For my little experiment, I assumed that gas prices were a reasonable $3 per gallon and that I drove an average of 50 miles a day (18,250 miles a year). My car averages 19 miles to the gallon so, over the course of 1 year, I purchase about 960 gallons of gas. At $3 a gallon, my annual spending on gas tops $2880. However, because I use my gas credit card for all of my purchases, I save around $150 per year, bringing my total spend closer to $2700.
Many people I know drive a great deal more. Some of those people have more fuel efficient cars than I do. Others do not. One of my friends puts about 20,000 miles a year on his SUV. In the best scenarios, it gets 16 miles per gallon. Thus, every year, he fills his tank with 1,250 gallons and spends around $3750. If he had a gas credit card, he would save close to $200 per year on gas. Fortunately for him he doesn’t drive a Hummer that gets 10 miles a gallon. With his driving, he would need to purchase 2,000 gallons of gas and spend $6,000 a year. Of course, he would save $300 with his gas credit card. He just wouldn’t be able to afford food.
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