With gas prices on the rise, are gas station credit cards a good deal?

With the price of gas hitting record highs, many of us are looking for relief at the pumps. Lots of credit cards offer cash back on gas purchases, but if you drive a lot, a gas station credit card might pay off.  

General rewards cards versus gas station cards

Before you sign up for a gas rewards card, consider what’s probably already in your wallet. Many credit cards offer up to 3% cash back specifically on gas purchases, along with discounts on other, non-gas purchases. Are you using the right card when you pay at the pump?

Take a look at where you’re buying gas, too. Are there stations nearby offering better prices? GasBuddy, Gas Guru and Waze are popular apps that can locate competitively priced options nearby.

Popular retail rewards programs might already offer discounts on fuel. Costco, Safeway, Krogers, Winn-Dixie and many others provide discounts on gas, often based on other purchases at their stores.

The benefits of gas station credit cards

Gas station credit cards typically offer discounts of up to 3% on gas purchases. If you already have a general rewards card that offers the same discount, a gas credit card may not be worth your trouble. 

But with gas station cards, qualifying requirements are often easier to meet, so they might make sense if you’re building your credit. Several offer extra discounts during an introductory period, usually tied to minimum spending requirements. 

BP currently offers $0.25 off every gallon for the first 30 days when you sign up for their card. With a new Exxon/Mobil card, you’ll get $0.30 off every gallon purchased your first two months, while Shell offers $0.30 off every gallon on your first 5 fuel purchases. All of these discounts have special requirements, including caps and introductory periods. Check their websites for details. 

One more upside: some gas stations cards work just like traditional credit cards, where you can expect the same discounts and cash back anywhere they’re accepted, including other gas stations. 

The downside of gas station credit cards

Whenever you apply for a new credit card, do your homework and do the math. Compare APRs, because rates and fees on gas station cards are traditionally higher than other cards offer. 

If you’re spending $500 per month on gas—or $6,000 per year—a cash back rate of 3% could net you $180. If your current credit card already offers 3% cashback on gas purchases, consider the introductory rates and offers against the amount of gas you’ll buy. 

Consider your credit history too. Have you applied for other credit cards recently, and would this new application impact your credit history? Can you manage the new card responsibly, paying off the full balance on time every month, or will it raise your credit utilization? 

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                                                                    Use Bright to stay on top of your goals.

Bright can help manage your gas station credit cards.

Bright can make smart payments on a gas station credit card, just like any other card. With Bright’s AI, we’ll study your finances and analyze your debt, looking at your APRs, balances and interest charges, then make smart card payments for you, automatically, every month. 

If you don’t have it yet, download the Bright app from the App Store or Google Play. Connect your checking and your cards in a snap, set a few goals and let Bright get to work.

Recommended Readings:

APR Vs Interest Rates - Understand the Difference and Details

How to Be A Smart Credit Card User‍