You might think that gas station credit cards are the best way to fill your tank. This seems to make sense, because why would the company selling the gas not offer the best perks to customers using their branded credit card?
The reality is very different. An average gas station credit card requires a 23.61% interest rate, nearly 7 percentage points higher than the national average of all general purpose credit cards, according to a new CreditCards.com analysis of 28 widely used gas cards. In addition, the study showed that the rewards offered by gas station credit cards do not match those offered by general purpose tickets.
How to measure gas station tickets?
The gas station credit cards in this survey offer discounts averaging $ 0.05 per gallon per gallon. If you consider that the national average for a gallon of gas is $ 2.66, according to AAA, then $ 0.05 a gallon is just under 2% in return.
If you live in a state where gas costs more, the numbers are even worse. In California, according to the survey, the average price per gallon of gas is $ 3.52. So, a $ 0.05 discount per gallon comes down to less than 1
It's easy enough to find general credit cards that offer 2% off gas and other purchases. Generally, these cards will also charge lower interest rates according to CreditCards.com, and they may offer other perks, such as sign-up bonuses. And you can not overlook the fact that a gas station credit card is usually limited to this gas station chain.
Petrol station tickets can be a good deal in a situation, people at CreditCards say. com. Twelve of the 28 analyzed cards offer an introductory price – most commonly $ 0.25 per gallon for two or three months.
"If you plan a major road trip, this is a case in which it might be worthwhile signing up for a gas rewards credit card," said CreditCards.com senior industry analyst Matt Schulz. "But even then there are restrictions to watch out for – some of the most generous introductory offers are capped at $ 100 in fuel credits, and you're probably even better off with a general cash back card."
Protect Your Credit
Gas station and business-specific cards can generally be tempting as they generally sign up easily. In many cases, you can immediately get a card at check-out and refrain from putting cash or crediting it on another card. However, it is important to remember that these are still credit cards.
"A gas card hits your credit in principle just like any other card." Schultz said in an email exchange with The Motley Fool. "It can be a good tool to help someone build credit from scratch or just rebuild bad credit because they may not be able to get other types of cards, just make sure they get theirs Pay off credits quickly, because otherwise the high interest rates can be a real problem. "
Schultz is also for retailer-specific cards, but he presented a precise scenario in which the use makes sense.
"Retail cards can be good if you are a frequent customer who pays out their credit every month and the card offers rewards not available on general purpose cards," he said. "In addition, you're probably better off with a general purpose card."
The key to every credit card is the monthly payment of your credit. If you do not do that, either offset or eliminate the rewards you earn. This makes gas cards, with lower rewards and higher interest rates, generally not a smart game for most consumers.
Daniel B. Kline has no position in any of these stocks. The Motley Fool has no position in any of these values. The Motley Fool has a disclosure policy.