There are many different credit cards available to consumers, and each has its uses, benefits, and disadvantages. Each credit card offers a credit amount for consumers to spend with the promise of repayment later. Gas credit cards are specific credit cards rather than general credit cards; these cards allow consumers to purchase a particular product at one particular store chain or places of business.
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Gas credit cards are a good option if you plan to use them enough to generate savings. They are also only a good option if they have reasonable fees and interest rates. Gas credit cards should be used responsibly as you would any other credit card.
There are advantages and disadvantages to every credit card, and gas credit cards are no exception. You should apply for a gas credit card if it is going to save you money, improve your credit score and you are reasonably sure your application will be accepted.
What is a gas credit card?
A gas credit card is one that can be used to purchase gas at particular stations such as Texaco, Chevron, or Exxon Mobil; some gas credit cards can also be used for general purchases or to get cash advances at ATMs. Gas credit cards are backed by banks or major credit card companies such as Visa and MasterCard through partnerships with the gas station franchises.
The application process to get a gas credit card is similar to regular credit cards; your financial information such as your credit history and credit score will be used to approve or deny your application.
What are the benefits of a gas credit card?
The main benefit of a gas credit card is savings at the pump. They have introductory offers such as $.10 off per gallon for the first 60 days or 3% on non-gas purchases. You can lower your gas bill with some gas rebate credit cards which offer ongoing cents-off per gallon, cash back or other rewards programs.
Special travelers’ gas credit cards also have rewards such as discounts on hotels and rental cars, roadside assistance, or traveler’s insurance.
What are the disadvantages?
Like all credit cards, gas credit cards have fees and restrictions. Every card will have its own terms and conditions, but common fees include annual membership fees, cash advance fees, late payment fees and overcharge fees.
Gas credit cards also charge interest on the balance on the card. While interest rates may start out low, they can change after six months, and they can become quite high if you miss a monthly payment; likewise, rewards such as cents-off per gallon cannot be used if your account is in default due to a missed payment.
In addition, many gas credit cards have limits on their rewards. Many of the rewards are good only for a limited time, for up to a certain number of gallons of gas a month or a maximum dollar amount that can be saved annually. Gas credit cards are only a good idea if your reward amounts are greater that the interest and fees charged.
When should I apply for a gas credit card?
All credit cards use your credit history and credit score to determine the likelihood that you will repay the debt placed on the card. All credit companies will have their own minimum scores and histories to get accepted; but if you have very low credit and need to improve your credit score, negative information on your credit score such as bankruptcies and judgments or if you have no credit history, then it is very likely that your credit card application will be denied.
Every American is entitled to a free credit report once every year from the three major credit bureaus: Equifax, Experian, and TransUnion. You should only apply for any credit card once you are reasonably sure you will be approved. An inquiry into your credit can reduce a credit score by as much as five points for each inquiry, according to SmartMoney.com.
When should I not apply for a gas credit card?
You should not apply for a gas credit card if you know that it is unlikely that you will be accepted based on your current credit history and credit score; an inquiry will only make your low score even lower. Look for a way to clear your bad credit history before applying.
Furthermore, you should not get a gas credit card if you are having trouble making ends meet. Many people think that a new credit card will help during financial troubles, but more than likely, it will only push them further into debt. Living within your means is the best way to weather financial storms.
Where can I find the best gas credit cards?
Each gas credit card has its own perks and rewards to fit the different needs and requirements for a variety of people. The best gas credit card is found through carefully weighing which rewards will work best for you.
Research all of the gas cards for gas stations that you frequent often. Comparing the minimum credit scores needed to be accepted, rewards, fees and interest rates of multiple cards would help you to decide which card is the best for you.
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