Gas station credit cards should you get one zero to thrifty gas utility boston

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Gas prices are starting to look like smart kid GPAs again and that usually prompts people to drive less so they can avoid paying the costs. This past weekend, I was pumping gas and looked up to see an advertisement for 6 cents off with every fill using their card and it got me thinking: should I get one of these gas station credit cards? I already have a credit card with a credit union that offers extra points at the pump so now I need to do a comparison. Let’s explore. I thought Credit Cards were bad?

My answer to that question would be…it depends. Using credit cards to regularly pay for things that you can not actually afford and regularly paying interest fees is definitely not healthy for your financial future. Racking up credit card debt can negatively affect your credit score. I’d double down on this sentiment if we are discussing retail credit cards that encourage you to shop more than you should in the first place. These are easy way to catch flat tires on your race towards financial freedom.

However, you can be creative with your credit card use if you have cash back or rewards points attached to your card. My Navy Federal credit card, for example, gives me triple points at the pump. In this instance, it would benefit me more to swipe my credit card at the pump instead of paying cash because I can easily just pay the balance off later and reap the points boost.

Where I live, the most prevalent gas stations are those ran by Valero, Circle K, 7-Eleven, and Shell. It would be quite a lot to compare the majority of different options, but I’ll take a look at the programs offered by some of these and a few others like Exxon and BP that are common in different parts of the country. Valero

Valero advertises up to 8 cents off per gallon which sounds pretty nice. Upon reading the fine print, the rebate only begins at the 50 gallon mark (at 4 cents) and then it becomes 8 cents off after 75 gallons. If I’m reading that correctly, then it sounds like you have to buy quite a lot of gas to see the rebate. That’s weak sauce in my opinion. Circle K

Now the benefits sound a little better. Circle K has an Easy Pay Debit Card (I’m assuming you don’t need a credit check to qualify) that combines both cash discounts with their rewards program. They offer a robust 20 cents off per gallon for the first 30 days of enrollment and then 6 cents off after that. For ease of mathematics, the latter will be used to calculate the benefit. Shell

I found two different cards with Shell: the Drive for Five card at 5 cents off per gallon and the Shell Saver card at 2 cents per gallon (this one is a debit card rather than credit card). Then there is their Fuel Rewards that is 5 cents off per gallon if you are on Gold Status. BP

BP is another with multiple card options, but their program is set up to reward you AFTER you’ve spent a certain amount of money with them. Their Visa credit card earns you 25 cents off per gallon after spending $100 with BP, 15 cents off after spending $100 on groceries, dining, and travel, and then 5 cents off for spending $100 anywhere else except non-BP gas stations (doh!). The non-Visa card they offer is simply a reward of 10 cents off per gallon after spending $100 at BP. These discounts are only good for a single fill up to 20 gallons though. Exxon Mobil

Phillips66, Conoco, and 76 are part of the Drive Savvy program which, at the time of this post, is offering 50 cents off per gallon in fuel statement credits for the first 30 days, then 10 cents per gallon until day 90, then 5 cents after that. Time to Crunch Some Numbers

Gas just breached the $3.00 mark again where and to make the calculation easier, I’ll stick to $3.00 for starters. Gas tanks range in sizes and usually increase with the size of the vehicle. I wasn’t a fan of the spend a bunch of money to earn a coupon incentives so here is a table comparing rewards points versus cash off programs.

The most glaring consideration is that your gas station specific card can only earn you those cash off rewards while using it at their pump. That is definitely a consideration if you travel often and end up in places where your gas station of choice is not as popular. Driving miles out of your way to achieve a cash back reward can be counter-productive.

On the flip-side, credit card rewards programs are only beneficial if you actually cash out your rewards points! Many people just end up hoarding the points so they never actually reap the benefits of their savvy swiping. Fellow blogger Financial Samurai has a blog post that explains how this can compound into devaluing your stash. Cost of travel fluctuates so what 30,000 points can get you today might not be anywhere near what it can get you tomorrow.

Looking at the numbers, it appears that when gas prices rise, it is better to go with a points based rewards credit card. When gas prices drop, then it looks like it would be the better bet to use a card that offers discounted price. Nothing says that you can’t carry two cards and fluctuate in your decisions based on the environment. Your situation may be different though, so definitely evaluate your location and habits before making a choice.