Every day, Americans collectively pump nearly 370 million gallons of gasoline—a staggering amount that equates to over a gallon for each individual in the nation, as reported by the U.S. Energy Information Administration. If you are a driver of a gasoline-powered vehicle, there are strategies to make your fuel expenses more cost-effective. One option is to acquire a gas credit card, while another approach involves utilizing a standard credit card that provides cash back or other rewards for various purchases. This article delves into the features of both alternatives.
Regular Rewards Cards With Cash Back on Gas
Credit card issuers and banks are keen to tap into the substantial expenditure that consumers allocate to gasoline purchases. Hence, many of them incentivize using their cards at gas stations.
Numerous rewards credit cards provide a percentage of cash back on virtually all transactions, typically starting at 1% or 2%, including gasoline purchases.
Certain cards feature varying reward tiers based on purchase categories, with specific emphasis on gas expenditures. For instance, the American Express Blue Cash Everyday card recently offered 3% cash back on up to $6,000 annual gas purchases at U.S. gas stations, in addition to other incentives for miscellaneous purchases.
Apart from cash back on all transactions, standard rewards cards do not limit you to a particular gas brand.
Gas Credit Cards From Oil Companies
Oil companies, in partnership with banks, offer gas credit cards. Most major oil corporations provide these cards, with various options catering to different consumer segments, such as regular customers and business entities with vehicle fleets.
Gas credit cards grant discounts per gallon purchased at affiliated stations, often starting at 5 or 6 cents but occasionally reaching higher amounts. For instance, the ExxonMobil Smart Card+ recently rendered significant discounts for new cardholders.
Similarly, the Shell Fuel Rewards Card offered noteworthy savings on fuel purchases for new cardholders, showcasing the benefits of such cards.
These cards can result in substantial savings, especially when gasoline prices are high, making them an attractive option for many consumers.
In addition to discounts on gas purchases, gas credit cards may offer cash back on additional expenses related to travel, such as car rentals and airlines, without imposing annual fees. However, it’s essential to be mindful of the potentially higher interest rates associated with these cards.
Usage restrictions vary among gas credit cards, with some limited to specific gas station chains, while others are usable across broader networks like MasterCard or Visa.
Which Type Is Better?
Choosing between a regular rewards card and a gas credit card hinges on factors such as your monthly gasoline expenses and brand preferences. Individual spending habits and credit history also play a role in determining the most suitable option.
For consumers with limited credit options, gas credit cards may present a more accessible choice compared to standard credit cards. Responsible usage of a gas credit card can potentially pave the way to qualify for a regular rewards card in the future.
It’s vital to consider the interest rates attached to gas credit cards, especially if you anticipate carrying a balance. Interest charges can offset any savings derived from rewards or discounts on gas purchases.
Lastly, exploring alternative cost-saving methods, such as cash payments or seeking out lower-priced gas stations, can potentially yield significant savings and should not be overlooked.
Will a Gas Credit Card Help Your Credit Score?
Effective management of a gas credit card, including timely payments, can positively impact your credit score. However, opening multiple credit cards simultaneously may have a temporary negative effect on your credit score. Additionally, optimizing your credit utilization ratio through responsible credit card usage can enhance your credit profile.
Do Debit Cards Offer Rewards for Gas Purchases?
Some debit cards now feature cash back offers on most transactions, typically around 1%.
Is It Better to Use a Credit Card or a Debit Card to Buy Gas?
Utilizing a rewards credit card may yield comparable or higher cash back rewards compared to a cash-back debit card. Moreover, credit cards offer enhanced consumer protection against fraudulent activities, making them a preferred payment method for many.
Bottom Line
While a gas credit card can provide immediate savings on gas purchases and may be easier to qualify for, a regular rewards card typically offers a more comprehensive benefits package for eligible consumers.