Credit cards

With pump prices so high, are gas credit cards worth it?

High gas prices are inevitable for Americans who drive to work or plan to hit the road this summer.

But there are ways motorists can save money at the pump, even with the national average for regular gas at $4.72 a gallon on Friday.

Indeed, Americans are looking for ways to fuel up cheaply: Internet searches for fuel and gas cards have grown rapidly alongside soaring gas prices, according to a Bank research note. of America Global Research.

There are different types of gas cards, including gas station credit cards from Chevron, Shell, Texaco, and other chains that offer fuel discounts and rewards. Some general credit cards from payment companies like American Express and Visa also offer cash back or valuable points when cardholders spend cash on gas.

“Obviously, it’s great to get rewards with a gas card, assuming you pay in full and avoid interest on your statement,” said Ted Rossman, senior credit card analyst at BankRate.com. “But the best gas card might not be the first that comes to mind.”

Although consumers may be attracted to gas station cards themselves, like Shell, they tend not to offer solid rewards, according to Rossman. Cardholders typically only receive between 5 and 10 cents per gallon of gas, and the cards also tend to have high interest rates.

“You don’t want to accumulate debt all the time, so if people don’t have a lot of discipline with credit cards, it might be better to use cash, because credit card debt is not goodespecially with high interest rates,” said David Chang, a credit card expert from The Ascent.

A branded credit card probably only makes sense if you live right next to a Shell or Texaco station from which you buy most of your gas, as it won’t earn you any pump rewards. other brands.

“If you live right next to a Shell station and you drive a lot, commute, and always fill up at that Shell station, a gas card might be beneficial,” Chang said.

What type of card should I get?

With gas prices as high as they are, a percentage discount will be worth more than slashing a few cents off your cost per gallon of gas.

Aim for a card that offers 5% cash back. “One percent is more meaningful,” Rossman said.

If gas is $5 a gallon, a 5% cash back card translates to 25 cents off each gallon, compared to the 5 or 10 cents a gas station card would give.

For example, the Sam’s Club Mastercard offers 5% cash back on up to $6,000 of gas purchased at any gas station. The Costco Anywhere Visa offers customers 4% cash back on up to $7,000 in gas purchases, not just at Costco.

In 2019, the average American household spent about $2,000 on gasoline, according to the Bureau of Labor Statistics. With gas prices now about 50% higher than they were that year, a 5% cash back rate can save the average American family $157 a year on gas , as calculated by Rossman. That’s the equivalent of a few free fills per year.

“You’re not going to get rich, but the point of these cashback cards is that you get something for nothing,” he said. “You would have spent the money anyway and you can avoid interest by paying off your balance in full. It’s kind of like free money.”

Should I get a new card?

If you spend a lot of money on fuel, getting a new card for the purpose of saving money on fuel may be worth it.

If you’re not a big spender, one of your existing credit cards may already offer 2-3% cash back on gas, which might be enough.

Preferred American Express Blue Cash, for example, offers 3% cash back at US gas stations that can be redeemed as statement credit at the end of each month.

“It’s not top of the market, but it doesn’t beat anything,” Rossman said.


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Cumulative discounts

To save even more, combine rewards cards with other money-saving strategies like downloading your gas station payment app. Branded apps typically offer discounts of 5 to 10 cents per gallon when you pay through the app, using a card of your choice.

“When you’re using a payment app, you’ll see the price you pay go down as you fill up,” Rossman said.

This technique both lowers the price of gas per gallon at the point of sale and earns you rewards after the fact. These rebates appear either as a credit on your monthly statement, or as a direct deposit or check.

Not taking advantage of fuel-saving programs at all is a mistake, according to GasBuddy analyst Patrick DeHaan.

“If you just go to a station and swipe your card, you’re usually paying more than you need to,” he said.

Reduce your mileage

Simply driving less or more efficiently is also a great way to save money on gas.

Motorists should aim to reduce the distance they travel by 75%, according to Chang.

His advice includes running errands at the same time instead of multiple trips, traveling light by removing extra weight from a vehicle or cargo hatch on top of a car or truck, and not spinning. in slow motion.

Sure, working remotely can also save you money since you don’t have to go to the office every day. “The best way to save money is to drive less. Working from home can act as a pay raise if you’re not spending money on gas,” Chang said.