Is it possible to lower your gas bills using a gas credit card or gas rebate card? Yes. If only someone would push the electric car through, then gasoline would be a worry of the 20th century!
Alas, gasoline prices are here and continue to take a big chunk out of your weekly income. While gas prices might be down overall, it’s hard to deny the fact that it is a costly non-controllable expense.
The basic idea of the gas rebate card is that you can get a percentage of that money back each month and thus lower your monthly bills.
Do Gas Cards Really Save You Money?
Yes, a gas rebate card can and may save you money by reimbursing you for a percentage of what you spent on fuel each month. The savings are applied directly to your credit bill. Like other rebate offers, While the savings may be about the same in some cases, you can clearly see what you save and how much of it when you can compare statements by the month.
The rebate percentage can differ according to the credit card company. Some may offer a rate of 1% and others up to 6% or more. Check the introductory rate, as it may be rather high. Another advantage to look for is in online account access (TIP: Also, be sure to check out regular cash back credit card offers since they often may have a higher cash back percentage on many different categories of purchases instead of just gasoline purchases like a strictly gasoline only gas credit card).
One limitation to be aware of is that some credit cards may only offer gas rebate cards for certain brands of gas—meaning only usable at certain locations. This will be of no significant issue if you have a regular gas station that you go to every month. However, if you go to several gas stations in a month, or more to the point, shop around for the lowest prices in town, it can be frustrating to have these limitations.
The best option, if possible, is to find a credit card company that offers general gas rebate rewards that works with any gas station. Another item to look for is a lower rebate percentage for general purchases. Lastly, be sure to read the contract thoroughly to find out details about annual fees and method of payment requirements (like outside credit card debit payment or in-store charging).
The Interest Equation
MSNBC recently compared the advantages and disadvantages of gas rebate credit cards for a story. They discovered that while consumers do have the benefit of spending less money at the gas pump overall with such rebate plans, often times consumers are blindsided by the interest rates. Usually what happens is that they use the rebate card, which gives a percentage off each individual gas purchase. Hence, a 5% rebate on gasoline that’s priced $3 a gallon might amount to $2.85 after the rebate activates, after the end of the month. Now it’s a matter of doing the math and finding out how much 15 cents can save in a given year. Some individuals may save $100 a year, but others not as much.
Furthermore, the issue of high interest rates must be considered, as this can invalidate the proposed savings. Unfortunately, for the wide-eyed consumer who believes he or she is getting a great deal on gas, not everyone is going to be saving money. The MSNBC investigation reveals that most interest rates on rebate cards are actually higher than they are for regular credit cards. The higher interest you pay, the more that great rebate is being swallowed up. This is why most financial experts suggest you look for a card that has a low interest rate and that you try to pay your whole balance in full every month so that you don’t carry a balance over and activate higher interest charges.
How Much You Save (and Keep) In a Year?
Naturally, if you do not carry over your balance then the interest rate is a moot point. If you are able to do this, then you should find a rewards card that rewards you for keeping stable spending habits and maintaining a high credit score. With a gas rebate card you can earn something for the money you spend—and the credit you quickly pay off.
To ensure that you get a good ideal and avoid swallowing up that extra $100 a year, try and look for a gas card rebate contract that doesn’t have an annual fee. Also, check for any other fees that might be charged at various times in the month or throughout the year. In order to get back that proverbial $100 you need to ensure there are no other profit leaks.
If you need help finding a credit card account that has this gas rebate option, use our free credit card finder “Chaser” tool. You can compare credit card offers and choose the one that offers the best deal for your budget. Start chasing that perfect rewards card right now!