With gas prices in some parts of the country well over $4 per gallon, consumers may want to consider using a gas reward credit card to offset the rising cost. With household budgets tightening, many people may be surprised at the significant savings that can come just by using a credit card. With savings being offered of up to 5% cash back, it can be financially prudent to use one of these cards.

Many of the better gas reward credit cards require you to purchase your gas from specific, eligible gas stations to earn the largest cash rebate. These are typically defined as stand-alone gas stations and not gas pumps at discount stores or warehouse clubs. Many of these cards allow you to earn a flat percentage of 1% on all other purchases as well.

When applying for a gas reward credit card, it is important that you read and understand all of the terms and conditions of the offer. Be on the lookout for offers that look too good to be true. For example, some offers with significant savings are actually ‘teaser’ offers that will expire after a short period of time. Others have a limitation on the amount of cash you can earn or require significant card usage before the higher rebate kicks in.

Examples of Possible Savings!

• According to AAA, a trip from Richmond, VA to Disney World in Orlando, FL would be a round trip of 1,478 miles. At an average of 20 MPG, the cost of gas at $4 per gallon would be $296 or 74 gallons. The cash rebate even at the lowest end at 1% would be $2.96, but at 5% the rebate would be $14.80.
• A weekly 20-gallon fill-up at $4 per gallon with a 1% rebate gas card would earn $.80 per week, which seems insignificant, but that would equate to $41.60 over the course of a year. At 5%, the savings would be $208 a year.

If you live in a multiple vehicle household, the savings will be substantially more. But keep in mind, using a gas reward card only makes sense if you pay the balance in full each month. The interest you pay to carry a balance month-to-month will easily eliminate any benefit that you can earn.

Posted in Credit Tips, Card Advice

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