The Federal Reserve Survey of Consumer Finances revealed that 11.9 percent of people with charge cards now had fuel credit cards. Signing-up to the best gas rewards credit card means that it is possible to make some extra cash from transactions that previously went unrewarded. That said, it is very important to balance any potential cashback gained from a rewards scheme against the debt interest payments on unpaid credit card debt. Those who stand to benefit most from a gas rebate credit card are the ones who clear their full balance during the 30-day grace period.
Make Some Extra Cash with a Gas Rebate Credit Card
A gas reward credit card enables the customer to benefit from up to a 5 percent cash rebate on fuel, not to mention smaller cash rewards on other purchases. For example, Chase offers a BP fuel credit card with 5% cashback on all gas purchases made at BP stations. Although benefiting from this saving may result in a change to the way we shop for gasoline, it is regularly regarded as the best gas reward credit card. Jim Mallery of MSN Money stated that: “The Chase Visa BP Visa Rewards card scores high on most every card-rating Web site.”
The T&C’s of Gas Rewards Cards May Change
- Certain offers appear more favorable than they really are, but these cards generally offer introductory rate for x months before lapsing. For example, the PerfectCard MasterCard from Chase offers a rebate of 6%, but only for the first 90-days. The rate then reverts to 3%.
- The MBNA offered what was a very popular AAA credit card providing 5 percent cashback on all fuel purchases. However, the lender subsequently changed this rate to 2% if that card was only used to buy gasoline.
Gas Reward Credit Cards and High APR Revolving Debt
A gas card application benefits consumers who only use their card for essential purchases and settle the full balance at month. Robert Manning, author of Credit Card Nation: The Consequences of America’s Addiction to Credit, stated: “Accruing debt and then paying interest to save a few dollars at the pump doesn’t make any sense.” Although spending a $1,000 on fuel leads to a cash rebate of $50, the median rate of interest is 14.31%, according to the Federal Reserve’s G.19 report on consumer credit. This not only means unpaid debt, it also leads to $93.10 of extra debt interest after factoring-in any cash rebate savings.
Pros and Cons of Gas Reward Credit Cards
A gas rebate credit card enables the consumer to enjoy up to 5 percent cashback on his or her gas purchases. This is beneficial to anybody who regularly uses a card to purchase gasoline, but doesn’t benefit from the transaction. The danger of any reward card is the it is often used to make unnecessary purchases. Failing to clear the balance at month end will also lead to debt interest accruing quickly. Only the most disciplined consumers stand to benefit financially.