The Reality of Gas Credit Cards

Gas credit cards… Mention the price of gas to anyone at this time and you will hear lots of complaining. Everyone has something to say about the high price at the pump.

I am driving about 40 miles every day which means that I am spending about $180 a month on gas for one car alone. I actually have two. How can I get a rebate, a discount, or any other gift to reduce these ridiculous gas prices? Are any banks willing to help?

Actually there are plenty of banks willing to offer assistance. They offer gas station credit cards to help me save my money. Banks are my friends. The offer seems so practical, so attractive, and I am enticed to get one.

Gas Card Catch

So, what is the catch? Simply put, the bank knows my needs – that I need gas for my car -- and as usual it is trying to profit on my problem. Gas credit cards offer rebates on every gas purchase and some of them on other purchases as well. However, I must tell you that many times the introductory offers are much different from what you expect.

For example, Chase Perfect Card gives you a six percent rebate on all gas purchases for the first 90 days; and after that period your rebate will drop to three percent. City Bank Dividend offers five percent cash back on gas for the first six months and then the rate decreases to two percent.

Gas Rewards Card and the Fine Print

I can’t emphasize this enough. Read the fine print. Re-read it. Make sure you understand it. The fine print is small, because the banks don’t want you to see it. They hope that you don’t read it at all.

Discover Open Road card offers five to 20 percent cash back on purchases. However, if you check the card’s terms and conditions you will see that you can earn unlimited cash rewards on all purchases, but it only applies to your first $100 in combined gas and auto maintenance purchases each billing period – up to $1,200 annually.

Let’s do some simple math here. What is a five percent savings on $1,200 annually? It is $60 per year or a saving of $5 per month. If I spend $300 on gas per month then my actual monthly saving with this card is 1.7 percent or $.07 per gallon. Wow! Is it even worth going through the application process to get the card?

Rewards You Have to Ask For

Don't forget the fact that in order to receive your actual incentive amount you have to go ahead and redeem it. Discover is not going to put your reward money on your account unless you asked for them. What a smart move on the credit card company’s part!

That would be like me not receiving a paycheck from my employer unless I asked for it every time it was pay day. You have to be your own advocate here because the credit card companies aren’t volunteering to hand over your rewards!

You have to redeem your rewards and they are redeemable in $20 increments. Moreover, (and here is a direct excerpt from the card terms)

rewards have no expiration date; however, if your account is closed for any reason or is inactive for 18 consecutive months or if you fail to make the minimum payment due by the payment due date for two consecutive billing periods, your cash back bonus will be forfeited.

Fuel Credit Cards and Interest Rates

Fuel Credit Cards and Interest RatesMaybe these cards have something more to offer -- like really good interest rates. Not so. Discover Open Road offers 10.99 percent to 18.99 percent APR, which is much higher than most regular credit cards would offer for a person with a good credit history.

Are you like most people? Do you carry a balance every month? Well, then this is definitely not a good option for you.

Gas Credit Cards and Balance Transfer

Most rewards gas cards offer a balance transfer option. This is not generally bad; however, if you are twice late with your payment, Discover will apply a default rate to your entire balance. I've never saw such a high default rate before which is as high as 30.99 percent. If you need balance transfer cards, let me show you how to apply simple common sense principles to select the right one.