Climbing gas prices can put a major crimp in your budget, especially if you have a long commute or live in a car-reliant location. Just cents more per gallon can quickly add up to a higher total gas bill, and when the price per gallon skyrockets by a dollar or more — as it did in some areas in March amid the Iran war — that can make every fill-up feel like a nail-biter.
Common solutions to higher gas prices are often tied to driving habits, whether that means relying less on your car and more on public transportation, or finding someone to carpool with on your way to work. Those gas-saving strategies are certainly valid, but they are not your only option, particularly when gas prices are getting especially steep. Another hack might already be in your wallet, or could be a smart addition to it: a gas rewards credit card.
How can credit cards help offset higher gas prices?
Gas credit cards offer “rewards on fuel purchases, which can help reduce the cost,” said U.S. News & World Report. These rewards may come in the form of points or a percentage cash-back on every fuel purchase.
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Many of today’s top gas credit cards “offer around a 3%-5% (or 3x-5x) return on your gas station spending,” said Yahoo Finance. And while this may not seem like much, it can “add up over time, especially while fuel prices are high.”
Are there any risks or drawbacks to using credit cards to cover gas?
Perhaps the biggest caveat is that gas rewards cards tend to be best for those who can afford to pay off their credit card balance in full each and every month. Given steep credit card APRs, “any rewards you might earn by paying with plastic would likely be overshadowed by the interest you’d rack up in just a single billing cycle,” said NerdWallet. Some cards may also charge annual fees, which can also eat into the rewards you earn.
Additionally, it is worth noting that cards may put a cap on the rewards you can enjoy in a certain period. “Depending on how much your regular gas bill is, these caps could make a difference in how much you can earn,” said Yahoo Finance.
How can you find the best gas credit card?
To get the most out of a gas rewards credit card, you need to know what to look for. There are two main types: specific “co-branded gas cards — those affiliated with a particular company such as Exxon or Shell,” and “general rewards credit cards,” said NerdWallet. The former “tend to offer incentives on fuel bought at those specific stations,” whereas general rewards cards allow you to earn rewards “on gas purchases made anywhere, not just with one specific brand,” and often at a higher rate. (There are, however, exceptions here, such as “cards affiliated with wholesalers like Costco and Sam’s Club, whose gas prices tend to be lower than average,” said NerdWallet.)
That said, when choosing a card, it is also important to note any associated costs. That could be a membership fee, as with the aforementioned wholesalers’ cards, or an annual fee.
For a general rewards credit card, you should also take a look at the card more holistically in terms of your financial habits. If you can “find a card that helps you save on gas along with your other regular budget items, you can save even more over time,” said Yahoo Finance.
