Gas Credit Cards

Yes, gas cards report to one or more of the big three credit bureaus on a monthly basis, just like any other major credit card. That’s true whether you have a gas card that only works for buying gas at a particular chain of stations or a card that’s accepted wherever Visa, Mastercard, American Express or Discover is. The first type is basically just a gas-station version of a store credit card. And using a store card is a great way to build credit.

Not all cards you might use to pay for gas report to credit bureaus, though. Prepaid cards and debit cards do not report, for instance. But if you have a credit card, you should see it listed on your credit report. You can check your latest credit report for free on WalletHub to see for yourself. And if you pay your bill on time every month, your credit score will gradually improve.

Yes. According to the Island Approach, you should get rewards credit cards that have benefits that match your top 2-3 spending categories. This way you can maximize your rewards without ending up with a million different credit cards in your wallet. Besides, if you only spend a relatively small amount on gas each month, a gas rewards credit card really wouldn’t do much for you. Say, for example, you only spend $50 a month on gas. Even if you get a gas rebate credit card offering 5% cash back, you’d only be saving $24 per year relative to a standard cash back credit card offering 1% across all purchases. That’s probably not worth the hassle (definitely not if an annual fee is involved). Ultimately, as a good rule of thumb, you need to spend more than $200/mo. for a gas card to be worthwhile.

Most gas rewards credit cards require good or excellent credit for approval. You even need at least fair credit to get a gas card that can only be used at a certain gas-station chain. But that doesn’t mean you’re out of luck.

If you want the convenience of paying at the pump (especially important when it’s cold out or you’re in a hurry), you can simply open a secured credit card. Secured credit cards offer nearly guaranteed approval, given that you are required to place a refundable security deposit which acts as your spending limit. Plus, some secured cards offer rewards from time to time.

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.

Using a gas credit card is merely one of the ways that you can save on fuel consumption. You can also use a website like GasBuddy, which identifies the lowest gas prices in your area. And many supermarkets have loyalty programs that allow you to earn gas rebates when you shop. So opening the gas reward credit card tied to the same gas station as your supermarket loyalty program is a great way to save extra.