Gas prices, although lower recently, are still a dollar (or more in some areas) then they were a year ago. In the wake of this, offers for Gas Cards from gas companies and major credit cards have increased as much as 14%. While at first glance credit cards that reward you for your purchases seem like a sure thing, there are both good points and bad points to consider when deciding, which is right for you.
There are several advantages to holding a Gas Card over a basic card. As Gas Cards have become increasingly popular, the rewards and incentives have grown in order to attract new consumers to match and beat most other reward card programs. Most companies now offer no annual fee as an introductory incentive, as well as higher rewards during the introductory period. In general, the rewards offered for gas purchases are higher than the rewards offered for other purchases. This is one factor that makes gas cards especially suited for individuals who refuel many times during the week and can also use them to purchase things like groceries, clothing, and other items.
Gas cards offered by gas stations often have higher rewards for gas purchases than other kinds of reward cards. This is how you earn your gas savings. There are gas stations that have card readers at the pumps that discount for customers who hold their company’s gas cards. On the other hand, gas cards offered by credit card companies give rewards on almost all other purchases in addition to gasoline, so be sure to consider your own spending behavior.
There are many different gas cards to choose from. This variety makes it possible for you to shop around to find one that works best for you. There are even some gas cards available specifically for college students or other types of consumers which offer special incentives suited for those target markets. For example, several cards designed for college students offer tuition rewards and accelerated rewards on textbooks on top of gas rewards. This can be an outstanding deal, and there are many deals like it for other consumer groups.
As with advantages, there are also some disadvantages to holding gas cards. If you do not have good credit, a gas card may be difficult for you to get without paying some kind of annual fee or having significantly reduced rewards. Another consideration is that interest rates tend to be higher on Gas Cards than on ordinary credit cards. This is why it is important to pay off your balance monthly; carrying a balance forward may eliminate the rewards you earn with your purchases.
Most cards come with a cap on the rewards you can earn each year, while others cap rewards on a monthly basis. This can lead you to spend your points (if you have a point card versus a cash back card) quicker than you might otherwise, or on things you don’t really want. You may find the cash back cards offer the best options for you, as these become cash in your pocket rather than points.
Adding a new line of credit can put a negative mark on your credit history. This is, in general, a fairly minor concern and easily remedied by holding fewer cards and keeping all bills paid on time.
Specialty store gas cards can be limiting if you purchase your fuel from more than one gas station or desire the same level of rewards on all your purchases. Some cards may not offer rewards on all purchases or offer different levels of rewards for particular purchases. For example, you may get 5% cash back on gas, but only 1% cash back on groceries and no reward at all for balance transfers or cash withdrawals. However, this can work in your favor only if you intend to use the card for gas purchases.
Most cards offer a generous introductory package which can accelerate your cash back or other rewards, however this can be misleading as the rewards decrease after the introductory period. Many times these offers also include 0% APR, or exceptional deals on balance transfers, just as you would receive with basic credit cards.
Gas cards most often benefit people who pay off their balances every month, use a lot of fuel each month and are able to limit their spending in order to take advantage of the savings offered by the wide variety of Gas Cards available. This doesn’t mean you can’t find a Gas Card that will work for you, it will just take some time to search out the best combination of APR, rewards and “fine print” that fits your needs.