Gas cards are just like any other rewards credit cards. So they shouldn’t take too much getting used to, and the biggest things to watch out for are pretty standard. For example, it’s important to know how much you’ll earn in rewards for each dollar spent as well how much those rewards are worth upon redemption. Together with the annual fee, this will tell you whether the card is a good value and help you get as much as possible out of it.
But there are a few unique factors to consider when using a gas credit card. We’ll highlight them below.
Prices Based on Payment Method: Sometimes, gas stations charge different prices depending on whether you pay with cash, a credit card or a debit card. Even a small markup could wipe out your savings from gas card rewards.
Holds: When you buy gas with a credit card, the transaction gets approved or denied before you actually start filling up your tank. Because credit card companies don’t know how much your gas will cost, they block off a certain amount of your available credit just in case. Each issuer has its own policy when it comes to these “blocks” (also known as holds). But you have to assume they’ll put enough available credit on hold to cover the cost of filling an average-sized car’s tank with regular gas. So you should make sure to have at least $50 - $60 in available credit when you head to the pump, depending on the price of gas. Otherwise, the purchase might be declined, perhaps leaving you stranded. This is especially important to consider if you have a low credit limit or if you’ve opted-in for the ability to spend more than your credit limit. Furthermore, even if you purchase only a small amount of gas, the difference between what you spend and the amount put on hold might not be released for up to three days. This could certainly disrupt your spending plans following your trip to the pump.
Discounts per Gallon: Many gas cards reward you with a discount or rebate of a certain number of cents for each gallon of gas you buy at a particular chain. The problem is the size of the discount or rebate doesn’t change with the price of gas. So you’ll get a high percentage back when gas prices are low and a low percentage when they’re high.
Finally, be careful not to get so focused on gas rewards that you neglect other important spending categories. You might want to consider getting a general-purpose rewards credit card for things like groceries, entertainment, air travel, etc.
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