Are gas credit cards still worth it?

by Isabella Craig on 2013/03/02

Gas prices are still rising, with gas costing more than $4 per gallon and the average American destined to spend more on gas in 2013 than 2012. Reducing expenditures by cutting down on the distance and amount driven is mostly not feasible for most of us, neither is buying a more energy efficient car.

The alternative heavily promoted by gas companies are gas credit cards. There are two types of gas credit cards – those which are specific for a gas station and others which can be used for a variety of different gas stations. I have realized that both do not offer the benefits and discounts that you want.

At first glance, gas credit cards seem very useful. Not only do I not have to carry cash to pay for the gas, which is especially convenient for long trips, but they also promise rewards and discounts. This is where the too good to be true part comes in.

They charge interest rates that are ridiculously high, some can charge up to 25 percent interest, which is a lot more than the default rate for ordinary credit cards. Not making the full payment for a gas credit card can be very expensive and far exceeds any benefit or discounts provided.

Other station specific cards offer rebates – the Shell Credit Card offers 5 percent rebate on gas and its related purchases at Shell stations. The Exxon Mobil Credit Card provides 15 cents per gallon rebate on gas purchases accrued at Exxon Mobil gas stations.

Rebates are always a nuisance because the process often takes many months, applications are often ignored and the processes need to start over. I have received requests for receipts multiple times that it becomes a hassle to even pursue the rebate process. There was also the time the rebate check accidently got thrown out because it looked like junk mail, a clever tactic employed by rebate processing centers, don’t you think?

I’ve come to the conclusion that it’s not possible for gas credit cards to provide benefits that are truly useful. After all, margins on gasoline sales are so thin that companies cannot afford to give elaborate discounts. Where there are rewards, there are also annual fees.

However, there are other credit cards that are not solely for the purpose of buying gas that DO offer much better rewards. My advice is to use a regular credit card (as opposed to a gas company specific card) that offers discounts, rewards and cash back for buying gas. Take a look at my recommendations below:

The Barclay Rewards Mastercard is pretty attractive as you can earn 2 points per every dollar spent on gas and also on grocery and utility purchases. There is no annual fee and 0% APR for the first year.

The USAA American Express Rewards Card also offer double points on gas and grocery purchases all the time. You can easily redeem your points for cash or gifts.

I would advise that you stay away from gas credit cards. And this is just not my advice, but comes straight from financial experts. If you do not want to pay cash for your gas, stick with an ordinary general purpose credit card like the ones I listed above. These will provide you with more overall rewards and offer lower interest rates.

If you do not believe me have a go with a gas credit card, see whether it does bring better rewards or not.
Do you have any gas credit card experiences you’d like to share?

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