Unique Way to Save on Gasoline Purchases
Just as analysts predicted, gas prices are quickly climbing toward $4.00 per gallon. This is a blow to many household budgets and consumers are looking for relief anywhere they can find it. Consumers might be surprised to discover how much money they can save by using a gas reward credit card.
Cash rebates on gas credit cards can actually add up to some significant savings. Some issuers give up to 5% cash back on your purchases, so it can be financially prudent to use these cards. But there are several pitfalls that consumers need to know before applying for these cards.
The most important tip for consumers is to read the Terms and Conditions of any credit card you might be considering.
Credit card issuers are brilliant marketers and can make any card sound very appealing. Many cards that advertise outstanding rebates for gas actually have “teaser” amounts that are only good for a short period of time. Others have a limitation on the amount of cash you will actually receive. Still other cards don’t begin the significant rebate until you have made a certain amount of purchases on that card. It is important to read the fine print to understand what your rebate will actually be.
Most credit cards also have restrictions on where you buy gas to qualify for the rebate. In most cases, gas must be purchased at an eligible gas station. These are typically defined as stand-alone gas stations and not gas pumps at discount stores or warehouse clubs.
Here is a look at several gas reward cards and what a consumer would actually receive.
* Blue Cash from American Express advertises that you can earn up to 5% cash back at gas stations. Unlimited rewards makes this one of the best cash rewards cards, including gas purchases. But you have to do a lot of spending to get there. If you spend less than $6,500 per year, then your rebate for general purchases, including gas, is only 1%. However if you spend over $6,500, then your rebate for general purchases and gas jumps to 5%. There is no limit to the cash back that you receive. After you hit $6,500, you will receive $2.50 for every $50 you put into your tank.
* Discover Open Road advertises 5% cash back on gas and auto maintenance. But this 5% rebate is limited to the first $100 in combined gas and auto maintenance each month. Hence, this 5% rebate on gas purchases can yield a maximum of $60 per year. Other purchases yield a 1% cash back amount.
* Chase Perfectcard advertises a 6% rebate on gas purchases for the first 90 days. The rebate then decreases to 3% on gas purchases but there is a maximum rebate of $15 per month from these purchases.
* Citi Diamond Preferred Reward advertises that you will receive 5 points per $1 spent at gas stations. This offer is for 12 months, after that you will earn 1 point per $1 spent.
* BP Visa Rewards advertises a 10% rebate during the first two billing cycles on gas purchases made at BP stations. After those two months, you will receive a 5% rebate. Unlimited rebates makes this a good card if you frequently purchase gas at a BP station. Only consumers that pay off their credit card balances each month should consider a gas rebate card.
If you carry a balance on your credit card, look for a low rate card instead. You will save a lot more money if you get a card with a low rate and focus on paying down your credit card debt.