Gas Credit Cards
While driving past a gas station you notice a price for gas that is about ten cents less than all the other places you have seen. A closer look reveals that this attractive price is only available to customers who utilize the station’s credit card.
So of course you think to yourself, “Hey, shouldn’t I get one of those cards?”
It depends. Do you fastidiously pay off your credit card balances each month? This is the only way you will actually get any sort of benefit from using one of these cards because otherwise you’re going to wind up paying interest on the balance. Chances are that the interest charges you pay will cost much more than the ten cents a gallon you save when you fill up.
If you do pay off your credit card balances each and every month, think about these other questions before you sign up for a gas card:
1. Do you already have a rewards card? Some rewards credit cards offer special incentives for using the cards to fill up your gas tank. For example, if your cash-back rewards card offers triple points for gas purchases then it may be more financially advantageous to use your rewards card instead of getting a new gas card.
2. Do you get gas from this place exclusively? If you only pass by this gas station occasionally then there really is no reason why you should get a card there. It’s different if you use this card all the time to fill up your gas tank before heading to work because then you might actually see a difference in the price you pay.
3. How many credit cards do you already have? Even if you can indeed save money with the gas card, be sure to look at the bigger picture. If you already have a bunch of credit cards you may not want to strain your wallet with yet another line of credit. It can drag down your credit score, even if you are current on everything.
4. Do you think you might spend more with a card than you would without one? Most folks spend more money with a credit card in hand than they do with cash or a debit card. Sometimes all it takes is getting a credit card from a gas station before you get into the habit of running inside and loading up on snacks every time you get gas. Of course, this is what the gas station wants you to do, but it’s not a very good financial move for you.
As with all personal financial decisions, there is a lot more to it than you may initially realize. Plenty of people save money using gas credit cards, but there are also plenty of people who wind up spending a lot more than they should once they get their hands on a gas credit card. Figure out if gas credit card is a good financial move before you fill out an application.
