How Do Gas Credit Cards Work and Do You Need One?
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Gas credit cards are credit cards specifically designed to offer rewards or benefits for fuel purchases. They often come with perks like cashback on gas purchases, discounts at certain gas stations, or other incentives related to gas spending. Some may also offer rewards on other types of purchases or include features like roadside assistance. They're particularly useful for people who drive frequently or have significant fuel expenses. In this guide, we explain how it works and whether you need one.
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How gas credit cards work?
Gas credit cards offer rewards or discounts specifically for purchases made at gas stations, typically in the form of cash back or points. They may feature fixed reward rates, such as a certain percentage cash back on all gas purchases, or rotating categories where higher rewards apply during specific quarters, which requires activation. Rewards can be redeemed as statement credits, direct deposits, or through the credit card issuer’s rewards program for travel, merchandise, or gift cards.
The best credit cards come with introductory offers and additional perks like purchase protection and travel insurance. It's important to consider annual fees, interest rates, and the need to activate rotating categories to maximize the benefits of a gas credit card.
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Features of gas credit cards
Cashback rewards
Gas credit cards typically offer cashback as a reward for fuel purchases. This might be a flat percentage, such as 1.5% or 2%, or it could be tiered, providing a higher percentage for gas and a lower percentage for other purchases. Some cards might offer rotating categories where the cashback rate on gas changes periodically.
Discounts
Cardholders might receive discounts per gallon or per transaction at certain gas pumps or chains. For instance, a card might offer a 5-cent per gallon discount at participating stations, or a percentage off the total purchase at affiliated stations.
Bonus rewards
These are often promotional offers that provide higher rewards rates for a limited time or up to a spending cap. For example, a card might offer 3% cashback on gas for the first $3,000 spent each year and 1% thereafter.
No annual fee
Many gas rewards credit cards don’t charge an annual fee, making them a more affordable option for those who regularly buy gas. This can help maximize the value of the rewards or discounts offered.
Roadside assistance
This service can be a significant benefit for drivers. It typically includes emergency services like towing, fuel delivery, lockout assistance, and jump-starts. The level of coverage can vary, so it’s important to check the specifics.
Sign-up bonuses
To attract new customers, gas credit cards often offer sign-up bonuses. This could be in the form of extra cashback or points after meeting a minimum spending requirement within the first few months. For example, a card might offer $100 cashback after spending $500 on gas within the first three months.
Additional rewards categories
Some rewards credit cards provide rewards beyond just fuel purchases. They might offer higher cashback rates or rewards points on categories like groceries, dining, travel, or utilities, which can be valuable for those who spend heavily in these areas.
Fuel tracking tools
Many cards come with apps or online tools to help track spending on fuel and other purchases. This can help you monitor expenses, manage your budget, and even identify opportunities to save or earn more rewards.
Purchase protection
This feature often includes extended warranties on items purchased with the card, as well as protection against damage or theft. For instance, if you buy a new tire with your card and it’s damaged within a certain period, you might be able to get it replaced or repaired at no additional cost.
Convenience
Gas credit cards can generally be used at a wide range of gas stations, not just at a single brand. This flexibility allows you to take advantage of rewards or discounts no matter where you choose to refuel.
These features vary by card issuer and specific card offers, so it's beneficial to review the terms and conditions and choose a card that best fits your spending habits and needs.
Who needs a gas credit card?
A gas credit card can be particularly beneficial for several types of people:
- Frequent drivers. If you drive regularly for commuting, road trips, or work, a gas credit card can help you save money on gas purchases through cashback or discounts.
- High fuel expenses. For those with significant monthly fuel expenses, the rewards and savings offered by a gas station credit card can add up. If you spend a large portion of your budget on gas, the cashback or discounts can provide substantial savings.
- Fleet owners. Individuals or businesses that manage a fleet of vehicles might benefit from gas credit cards, especially if they can take advantage of bulk discounts or specialized rewards for commercial use.
- Travelers. Frequent travelers who drive long distances can benefit from gas rewards cards and discounts on gas purchases, as well as any additional perks like roadside assistance.
- Budget-conscious individuals. Those who are looking to manage their fuel expenses and make the most out of every purchase might find a gas credit card helpful for tracking spending and earning rewards.
- Loyal customers. If you frequently visit specific gas stations or chains, a gas credit card affiliated with those stations can offer additional discounts and rewards for your loyalty.
Who shouldn't use a gas credit card?
While gas credit cards offer various benefits, they might not be the best choice for everyone. Here’s who might want to avoid them:
- Infrequent drivers. If you don’t drive often or use alternative transportation, the rewards or savings from a gas credit card may not outweigh the effort of managing an additional credit card.
- People with poor credit. Gas credit cards, like other credit cards, typically require a good credit score for approval. If you have poor credit, you might not qualify or might face higher interest rates and fees.
- Individuals with high credit card debt. If you already have significant credit card debt, adding another card can increase your financial strain. It's important to manage existing debt before taking on new credit.
- Users who don’t pay their balance in full. If you tend to carry a balance on your credit cards, the interest charges on a gas credit card could outweigh the rewards you earn. It's crucial to pay off the balance each month to avoid interest and maximize benefits.
- People who prefer simplified rewards. If you prefer straightforward, uncomplicated rewards programs, a gas credit card might not be ideal. Some cards have complex reward structures or rotating categories that can be harder to manage.
- Those who don’t drive. If you use public transportation, ride-sharing services, or don’t drive at all, a gas credit card won’t be useful for earning rewards or discounts on fuel.
A $200-$400 line of credit designed with you in mind
- Instant access to funds
- No minimum credit score
- Flexible payment plans
- Regular credit limit increase
- Build good credit history
Best gas credit cards
Chase Freedom Flex
Chase Freedom Flex offers 5% cash back on rotating quarterly categories (including gas), up to $1,500 in combined purchases each quarter when activated and 1% cash back on all other purchases. There is no annual fee, 0% intro APR for the first 15 months on purchases and balance transfers, and access to Chase Ultimate Rewards® points. You also enjoy purchase protection, extended warranty, and travel and emergency assistance services.
Blue Cash Preferred® Card from American Express
With a Blue Cash Preferred Card, you enjoy 4% cash back on U.S. supermarket purchases (on up to $6,000 per year, then 1%), 3% cash back on transit (including gas), 3% cash back on select U.S. streaming subscriptions, and 1% on other purchases. It has a $95 annual fee (waived for the first year), and cash back is received in the form of Reward Dollars that can be redeemed for statement credits. Other perks include access to American Express offers, purchase protection, and extended warranty coverage.
Citi Custom Cash® Card
The Citi Custom Cash Card offers 5% cash back on your highest spending category each billing cycle (including gas), up to the first $500 spent, then 1%. 1% on other purchases. There is no annual fee, and cash back is applied as a statement credit. You enjoy introductory 0% APR on purchases and balance transfers for the first 15 months, after which a variable APR applies. Also includes access to Citi Entertainment® and other exclusive offers.
Discover it® Cash Back
With a Discover it Cash Back card you enjoy 5% cash back on rotating categories (including gas) up to the quarterly maximum when activated, then 1%. 1% cash back on all other purchases. There is no annual fee, and Discover matches all the cash back earned at the end of the first year for new cardmembers. The other perks include 0% intro APR on purchases and balance transfers for the first 15 months, and no foreign transaction fees.
Pros and cons
Pros
- Cashback rewards. Earn cashback on fuel purchases, which can add up over time if you spend a lot on gas.
- Discounts. Get discounts per gallon or on total fuel purchases at specific gas stations, potentially reducing overall fuel costs.
- Sign-up bonuses. Take advantage of introductory offers, such as extra cashback or points after meeting a spending requirement.
- Additional rewards. Some cards offer rewards in other categories, like groceries or dining, providing more value beyond just fuel.
- No annual fee. Many gas credit cards come with no annual fee, making them a cost-effective option for earning rewards on fuel purchases.
- Roadside assistance. Benefit from emergency services like towing, fuel delivery, and lockout assistance, which can be valuable for frequent drivers.
Cons
- High interest rates. Gas credit cards may come with higher interest rates compared to other credit cards, which can negate rewards if you carry a balance.
- Limited rewards. Some cards offer high rewards rates only for gas purchases, with lower rates or no rewards for other types of spending.
- Complex reward structures. Some gas credit cards have complicated reward systems or rotating categories that can be difficult to track and manage.
- Credit requirements. These cards often require a good credit score for approval, which might be a barrier for those with less-than-perfect credit.
- Not ideal for infrequent drivers. If you don’t drive often, the benefits of a gas credit card may not be significant enough to justify having one.
- Limited use. The rewards are generally tied to fuel purchases, so the card might not offer as much value if your spending is concentrated in other areas.
A $200-$400 line of credit designed with you in mind
- Instant access to funds
- No minimum credit score
- Flexible payment plans
- Regular credit limit increase
- Build good credit history
FAQs
Do gas credit cards offer roadside assistance?
Many gas credit cards include roadside assistance as a benefit, which can cover services like towing, fuel delivery, and lockout assistance. Check your card’s terms to see what services are provided.
What happens if I carry a balance on my gas credit card?
If you carry a balance, you’ll accrue interest charges, which can outweigh the rewards you earn. To avoid interest charges and maximize benefits, aim to pay off the balance in full each month.
Can I use a gas credit card for other purchases?
Yes, most gas credit cards can be used for other types of purchases, but the rewards or benefits are usually focused on fuel spending. Check the card’s rewards structure for details on earning rates for non-fuel purchases.
The bottom line
Gas credit cards can be a great option for frequent drivers who want to save on fuel and earn rewards, offering benefits like cashback on gas purchases, discounts at certain stations, and additional perks such as roadside assistance. However, they may not be as valuable for infrequent drivers or those who carry a balance, as high interest rates can outweigh rewards. Additionally, rewards are typically focused on fuel purchases, so the benefits might be limited if your spending is concentrated elsewhere. Evaluating your driving habits and financial situation can help determine if a gas credit card is a good fit for you.
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