dcsimg

What is a stand-alone gas station? What does 'Pay-at-the pump purchases' mean?

By , CardRatings Contributor

Our credit card articles, reviews and ratings maintain strict editorial integrity; however we may be compensated when you click on or are approved for offers (terms apply) from our partners. How we make money.

A "stand-alone gas station" means just that: it's a gas station, by itself, not connected to or owned by a larger store. We hear versions of this question a lot lately. Let's say you just received one of the best gas rebate credit cards, but your rewards points balance seems a lot smaller than you expected. That's because your gas purchase might not look like a "gas purchase" to your credit card company's database.

When we talk about rebates on gas purchases, we're almost always talking about "pay-at-the-pump" purchases. That means you pull up to the pump, swipe or tap your card, and start filling up. If you venture inside a connected mini-mart and interact with a cashier, your purchase probably won't trigger a bonus. And if your pump happens to be at a grocery store or at a discount warehouse club, you're likely to give up some extra rewards points.

I can think of three reasons why your credit card issuer encourages you to fill your tank at a free-standing gas station:

  • Technology. When setting up a merchant account, a retailer must select a processing code that defines the type of business they're in. That helps banks set fees and automate fraud detection activity. However, if a grocery store that also sells gas opts to register their account as a "supermarket," your bank can't tell the difference between 12 gallons of gas and a dozen donuts.
  • Psychology. Credit card platform providers strive for universal acceptance. If they can make you feel comfortable using credit cards for small purchases, like gas station fill-ups, you'll feel more secure about carrying less cash. Even though retailers subsidize rebates with interchange fees, some banks are willing to pony up for bigger bonuses to serve this longer-term objectives.
  • Business. Even though studies show it's expensive and sometimes dangerous to process lots of cash in your business, some gas station and convenience store owners have lobbied hard against the shift toward paying with plastic. Rewards credit cards with bonus gas rebates encourage consumers to fill their tanks at stations that actively welcome their business.

Regardless of your personal opinion on interchange fees and their effect on retail pricing, shopping with the best rewards credit card for your spending pattern can help you earn back any markup that gas stations or other merchants try to pass along.

0 Comments

Be the first to comment!

Start Here

Search. Compare. Apply.

Featured Partner Cards

loading
  How is your credit?
Oops! Your credit does not qualify you for this card. Applying and being rejected for this card could possibly hurt your credit
We are redirecting you to offers you are qualified for based on your credit.
720-850
Excellent
660-719
Good
600-659
Fair
350-599
Poor
X
CardRatings is excited to announce the launch of the
100% Free CardRatings Email Course to Learn How to Maximize Travel Rewards.

Created in partnership with ChooseFI

We partnered with ChooseFI to combine CardRatings’ offer expertise with ChooseFI’s tried and true travel rewards strategies. Get to know ChooseFI: they have changed tens of thousands of lives and recently won Podcast of the Year at FinCon.
You may think you are a rewards travel expert, but rewards strategies are changing (e.g., the days of card churning and manufactured spending are numbered). Learn powerful, sustainable strategies (a couple of which even you die-hard travel experts might not know). You'll be so glad you did.
We're planning more courses for the future; this is just the beginning of our journey.
BROUGHT TO YOU BY: