Concept: Credit card companies have a number of incentives to encourage you to use their credit card. This includes receiving a fee from the merchant that accepts the credit card and if you don’t pay off your credit card bill in full each month, the credit card companies earn interest by loaning you the money. To encourage you to spend more money, credit cards have come up with a number of reward offers in specific areas. One of the more recent reward credit cards is the gas reward credit card.
Will You Save Money?: Yes**
Comments: Gas reward credit cards are similar to cash back reward credit cards with some enhancements directed at those looking to save money on gas. Most gas rebate credit cards offer a higher percentage rebate for gas purchases and a lower percentage reward for other types of purchases. The rebates on the gas reward credit cards are usually issued monthly (as opposed to cash back reward cards that usually payout once a year) as a credit in your account.
**The actual way the reward is given varies from credit card company to credit card company so it’s necessary to research this to make sure that you can actually use the reward you are receiving. If you can’t, then you won’t be saving any money.
**Many gas reward credit cards have restrictions. Common ones are that the rebate can only be earned when the transaction takes place as a pay-at-the-pump purchase (as opposed to paying the cashier at the gas station). Some credit cards also limit the total annual rebate amount you can receive on your gas purchases. Any restrictions need to be factored in to calculate your real savings.
**Gas reward credit cards usually carry interest rates higher than other types of credit cards. If you don’t pay of your credit card balance in full each month, the interest charges you pay will likely wipe out any savings you have received from the gas reward card.
**While the gas reward credit cards will almost always pay a higher rebate than paying cash at the gas station or with a standard cash back credit card it’s still worthwhile to compare and calculate which method will save you the most money.
**If you use the credit card to purchase a variety of impulse snacks or other items at the gas station convenience store, the more expensive prices of these items compared to your grocery store will quickly negate the savings you received for using the gas reward card.