Regular rewards cards often pay out more per gallon.
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Gas is a huge expense for most Americans, which may make you want a credit card that offers rewards for fuel purchases. Yet you might be surprised to learn that a gas credit card isn’t actually the best way to save money on gas.
Although gas cards may sound like quite the investment for a frequent commuter, that’s not the case. Their disadvantages make it needless to own, when you can earn even more benefits and rewards through a traditional rewards card.
Gas cards have been dwindling in popularity, according to NerdWallet. Especially compared to general purpose cards, which are considered more flexible. From their outrageous interest rates to their lack of bonuses, gas cards are rarely worth applying for.
Gas cards offer little to no savings
Let’s say a family that drives often gets the BP Visa card  — a typical card. It offers 25 cents per gallon in rewards for every $100 spent on gas at BP.
So if they fill up their tank with 15 gallons and save 25 cents per gallon, they’ve only saved $3.75 at the expense of $100. Families who drive less or use more efficient cars won’t even save that much.
If they use this card anywhere else, they’ll also receive 15 cents per gallon in savings for every $100 spent. Which works out to a meager $2.25 saved on a 15-gallon fill-up. In contrast, nearly any cash back credit card will earn at least 1 percent on all purchases.
Gas cards have high APRs
Creditcards.com recently conducted a survey of 28 of the largest major-brand gas cards — and found that their disadvantages are legion. The gas cards surveyed had an average APR of 23.61 percent — far above that of general rewards cards, which stands about 16.62 percent per Creditcards.com’s weekly rate report.
The survey resulted in a four-way tie for highest APR at 26.99 percent.
These APRs go hand-in-hand with gas cards’ high acceptance rates. So, if you’re struggling to get accepted for a traditional card, a gas card may be a valid option — only if you make it a point to pay in full every month.
Gas cards have confusing policies and low bonuses
Creditcards.com also found these cards offered sub-standard sign-up bonuses, and their rewards were filled with confusing terms and limitations such as minimum spending thresholds, maximum limits, qualified purchase requirements, and tiered rewards levels.
Here are some of the survey’s findings…
- 6 cards required purchasing 45 gallons before you can earn rewards
- 6 cards set a maximum limit that you can earn (one’s policy caps your rewards at $99 per year)
- Most cards automatically applied rewards, instead of allowing cardholders to decide whether to keep saving
These specific restrictions aren’t always made clear to the cardholder — who may think they’re earning more rewards than they really are.
Of the 28 cards CreditCards.com analyzed, only one — Speedway’s Speedy Rewards MasterCard — offered any bonus offers.
Alternatives to gas cards
All of the advantages of a gas card are outweighed by the disadvantages. But you can find even better deals with other general rewards cards. Some will offer generous discounts on gas, while also giving you rewards on other purchases, and they aren’t even from gas retailers.
This card from Pentagon Federal Credit Union offers 1.5 percent cash back on all purchases (including gas) made with the card. They offer 2 percent for PenFed Honors Advantage Members.
What’s even better, the APR is way lower than your average gas card — as low as 11.99 percent. That rate can go up to 17.99 percent based on your credit.
This card offers 3 percent cash back on gas purchases from any stand-alone gas station in the U.S. (which excludes warehouse stores like Costco), and 1 percent on all other purchases.
You also get zero interest for your first year with the card. The interest rate after that is variable — from 15.24 percent to 26.24 percent — based on your credit. So, if you have poor credit, you may want to go with another card, but if your credit allows you a low APR, the benefits with this card are great.
While this isn’t a dedicated rewards card, you can earn 2 percent cash back at gas stations and restaurants. And if you use your card to purchase office supplies, internet, cable, and phone services, you’ll earn 5 percent cash back.
You’ll also earn 1 percent on all other purchases. A plus, there’s a $500 bonus if you spend $3,000 in your first three months with the card — but make sure you have the cash to pay it back.
The interest rate can vary from 15.49 percent to 21.49 percent, based on your credit.
For tips on how to use credit cards wisely to stay out of debt, visit Debt.com’s in-depth report How Do Credit Cards Work.
Kristen Grau contributed to this report.
Published by Debt.com, LLC