Concept: Gas stations must pay a percentage fee to the credit card company every time you use a credit card to pay for your gas. If you pay for your gas in cash, they don’t have to pay for this fee. They can therefore give you a small discount to reward you for not using the credit card and not having to pay the credit card fee.
Will You Save Money?: Yes**
Comments: As gas prices rise, gas stations are able to offer bigger and bigger discounts for paying cash. Take the following example. If gas is $3 a gallon and the credit card company charges a 3% fee for a transaction, that means the gas station must pay $0.09 to the credit card company for every gallon of gas you buy. The gas station can offer you a $0.05 per gallon discount for paying in cash which gives you a discount while the gas station also makes $0.04 more for every gallon you purchase than if you paid by credit card.
**While this is better than not receiving any type of discount, there are cash back credit cards and gas specific reward credit cards that may offer discounts of higher percentages. While you can save money by paying for gas in cash at stations that offer a discount for paying in cash, you might be able to save more by paying for gas with a credit card that gives an even bigger cash back bonus.