Gas Credit Cards: Their Benefits and Disadvantages

Due to the constant rise of gas prices, many credit card and gas companies are offering gas credit cards to their consumers. As a matter of fact, there is a 14% increase in the number of companies that provide gas credit cards nowadays. These cards have many advantages. However, they also have disadvantages that you, as a consumer, should know about. Knowing both the positive and the negative points of these cards is crucial to determine whether a gas card is right for you.

What is a Gas Credit Card?

A gas credit card is specifically designed for people who are in constant need of purchasing gas. It can be used to purchase fuel at gasoline stations at lower costs. These include but are not limited to Chevron, Exxon Mobil, and Texaco. It can also be used towards other gas-related transactions. Basically, this card is meant to give you discounts on fuel, although some types may also offer points on purchases not related to gas.

This card is issued by leading credit card companies and banks that have a collaboration with specific gas stations. If you would like to get a gas card, the process is pretty much similar to a regular credit card. Your financial information will be evaluated and your credit score and payment history will be checked.

Benefits

There are a number of benefits offered by gas credit cards.  The most obvious is that you can save a lot when you purchase gas at your preferred gas station. Depending on the type of card you have, the discounts on gas prices could possibly go over $10 per gallon. There may be requirements needed to take advantage of this offer, however. For instance, you may be required to purchase a specific number of gallons of gas within the first month of card ownership before you can get the discount.

There are also other rewards that you can get with this card, such as 1% to 5% cash backs on groceries and other non-gas acquisitions. There are also special gas cards for travelers. You can use them to earn discounts on hotels and in renting cars. There are some that may also allow you to convert your earned points to air tickets.

Disadvantages

Like any other cards, a gas credit card may also have several disadvantages. One is the annual fee that usually goes with it. Some issuers, though, may waive the fee for the card on the first year. Apart from the annual fee, there are also other fees, such as cash advance fees, overcharge fees, and late payment fees. There may also be restrictions on the gas station where you can accumulate points. In addition, some of these cards may have expiration dates for earned points.

Each card, whatever its type, has its own perks and disadvantages. Comprehend the terms and conditions of the card first before you submit an application. It is best to apply for a gas credit card if you have a good credit rating to enjoy great deals and rates.