Use Gasoline Credit Cards With Caution

Posted by Nick Niesen on October 29th, 2010

Gasoline prices are top of mind for everyone right now. With prices actually passing the $4.00 per Gallon mark in certain areas of the United States, it is no surprise consumers are looking for ways to save at the pump. One method that many people are looking into now is gasoline rebate cards. These credit cards function just as any other card does but they can save money on gas purchases. This can be a welcome savings, but if these cards are not managed properly their value can be lost very quickly.

As with all credit cards, if you maintain a balance of any kind, they will cost you money. Gas rebate cards are no different. Most gas rebate cards offer around 5% back on all gasoline purchases, which can be a good savings if you go through a lot of gas. However, even with pristine credit you will probably have an interest rate of around 10.9% to 14.9%. If you think you are saving at the pump while you are carrying a balance you are mistaken. 5% cash back means very little is it is costing you 14.9% interest on a sizeable balance. If you can, pay off your card every month. If you must carry a balance, don't worry about reward credit cards and do whatever it takes to get your APR down.

When you are choosing a gasoline credit card there are several things you need to keep in mind. Not all rewards cards offer cash back. Many offer shopping discounts or merchandise for making purchases. If this merchandise is what you are looking for, then you are in luck. Often the non-cash rewards are much more generous than cash back. IF you are trying to save money however these cards are clearly not the way to go. 5% back is better than goods you don't want.

When choosing your gas rebate card, make sure that you are not limiting yourself to the point of being unable to take advantage of the cash back. Some gasoline credit cards are limited to a single gas station, offer rebates for a limited time, or have similar caveats that greatly diminish the value of the card. With that said, if you can still benefit with some of these limitation you can increase the value of your card. The more limited the offer generally the more you can earn or save. Of course this is completely negated if you can't take full advantage of the offer.

In the end, your own spending habits will determine if a gasoline rebate credit card is right for you. The key is to be careful, do your research, and make sure you are getting the most value from your card as possible.