Very few things differentiate gas stations these days. Gas prices in most neighborhoods don't stray more than a few cents apart among competitors. One filling station might have a better convenience store, yet require a little more patience to get in and out of. In most states, "service" simply refers to whether the pumps and restrooms get cleaned hourly or monthly. That's why most major gas stations partner with credit card issuers. Affinity rebate cards build brand loyalty, even getting some consumers to switch allegiance.
#1: Check the fine print on gas rebate offers.
Get five cents per gallon back (as a credit in the convenience store). Earn a dollar per gallon (but only on your first ten gallons). Enjoy a free car wash (after you've paid for twelve). Every gas station credit card seems to come with a special clause that takes the air out of its tires. Think about the benefits you want the most, like instant discounts at the pump, annual cash-back rebates, or special promotions. Sign up for a gas rebate reward card only when you're sure you'll be able to reap real rewards before you run into any earning or redemption limits.
#2: Look beyond rebates for more value from your gas station credit card.
Most gas stations use pump signage to promote your potential cents-off per gallon. They might not be giving you the full picture. Many gas station credit cards also include added value benefits, including roadside assistance, rental car insurance, concierge service, or lost wallet protection. A card's annual service fee might be the same or less than similar membership costs for travel clubs or auto protection plans. You might not mind a smaller rebate if your gas card saves you a bigger chunk of change during an auto-related emergency.
#3: Balance the right credit card deal with the right gas station.
The gas station with the green logo wants to save you three cents per gallon, while the discount warehouse with the red sign wants to save you ten cents per gallon. However, that red sign might not really be the best deal if it takes you out of your way to get to the pump. For most of us, ten cents per gallon means a savings of about a buck per fill-up. Driving more than five miles out of your normal commuting pattern could eat up that rebate, or even cost you more in wasted gas. More savings on paper doesn't always add up to more green in your wallet.
#4: Consider gas station loyalty vs. flexibility.
Credit card issuers have discovered that interchangeable awards leads to long-term loyalty. That's why so many of today's most popular credit cards allow you to exchange loyalty points for gift cards at a variety of gas stations, among other retailers. A bank-branded reward card that lets you earn bonus points no matter where you pump gas or buy groceries could help you get to your reward faster than a gas station credit card. However, if you really intend to frequent the same gas station every week, look for programs that offer special loyalty bonuses.
#5: The interest rate's still important, no matter what perks you get.
Like other private label credit cards, many gas station credit
feature some of the highest annual percentage rates on the market. Gas
and credit card issuers use profits from finance charges and service
help fund your "cents off" offers and rebate bonuses. Even if you
down your entire balance every month, protect yourself against surprise
costs by comparing interest rates. All other elements being equal, go
card that costs you less.
While it's tempting to carry around a stack of gas reward credit cards in your wallet, sticking to just one or two can prevent damage to your credit report. Focusing most of your transportation spending on a single gas card can also help you budget more effectively, especially if you like to mix vacation driving with your daily commute.
About the Author
Curtis Arnold, a nationally recognized consumer educator and advocate, has been educating consumers about credit cards since 1998. New! Curtis is the author of "How You Can Profit from Credit Cards: Using Credit to Improve Your Financial Life and Bottom Line" (FT Press, 2008). He is also the co-author of the upcoming Complete Idiot's Guide to Person-to-Person Lending (Alpha Books/Pengiun Group USA, April 2009), a contribitor to The Ultimate Allowance (InnerWealth Publishing, 2008) and is extensively featured in 42 RulesTM for Driving Success With Books (Super Star Press, January 2009).