Does your card reward you for buying gasoline?
- Gas prices have reached recent record highs.
- A credit card might help offset some of the costs.
- You’ll want to look for a card that offers additional rewards for gas purchases.
Gasoline prices have hit a new record high with the national average price now topping $5 a gallon for the first time. And sadly, things are likely to get worse as prices are forecast to continue to rise in the coming months.
Since it’s so expensive to fill up now, it wouldn’t be a surprise if you were struggling with commuting costs. But the good news is that a new credit card could help defray at least some of this added expense, making it easier to manage the high cost of gasoline.
How can a credit card help you deal with rising gas prices?
As gas prices rise, using the right credit card to pay at the pump will be more important than ever.
That’s because some credit cards offer extra bonus points, miles, or cash back if you make purchases at gas stations. In contrast, other cards may offer cash bonuses for other types of spending, like dining, but don’t give you additional rewards if you fill up your vehicle.
With gas prices so much higher than in the past, additional bonus rewards could pack a punch. Let’s say, for example, that you use about 560 gallons of gasoline per year, which is a reasonable estimate of how many gallons the average person spends.
If gas costs about $5 a gallon and you use 560 gallons a year, that could mean spending about $2,800 a year at gas stations. If your credit card offers only 1% cash back on gas purchases, you’d end up with about $28 per year in card rewards.
But if your card offers 5% cash back at gas stations, you could earn total rewards of about $140, assuming the bonus rewards are applied to all gas purchases throughout the year. That’s a lot more money put back into your wallet thanks to a change on the card you use.
Should you take out a gas card?
Now, the example above is just a hypothetical one, and you’ll need to consider several different issues when deciding whether to get a gas credit card.
First, you’ll need to research your card options and see if you can get approved for one that offers additional gas rewards. You’ll also want to read the fine print, for example, if there’s a cap on the amount of spending eligible for the bonus. Finding the right gas card will be critical to earning rewards generous enough to offset some of your extra gas costs.
Second, you’ll want to think about how much gas you actually use. If you rarely drive and don’t use a lot of gas, then it may not be worth signing up for a gas card, as the added rewards wouldn’t end up being very useful to you.
Finally, you’ll want to compare the rewards your new card will offer to your current card, as well as compare other expenses, like annual fees. If you find you can do better and reap more rewards with a new card, then there’s generally no problem applying, as long as you don’t mind a credit check for a few years. Additional rewards will add up quickly with high gas prices, and your card issuer’s bonus helps at least cut your gas bill a bit during these unprecedented times.
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