Gasoline is one of life’s most important commodities right now, and until society truly moves away from gas-powered cars, high gas prices will affect everyone. Thanks to recent world events, gas prices have risen again and many people are turning to gas credit cards in an effort to save a little when filling up. This can be a bad idea compared to using a standard credit card, and here’s why.
Why did gasoline prices start to rise again in October?
As Consumer Reports wrote, gasoline prices are rising again nationwide, and as of October 10, 2022, the national average for a gallon of regular gasoline was $3.92. In California, gas is already past $6 a gallon. The main reason for this recent rise in gas prices simply comes down to OPEC and Russia’s decision to cut oil production.
As earlier in the year, their decision to cut oil production has led to higher prices that customers have to pay. On top of that, earlier this year Russia invaded Ukraine and in response the United States and many other countries decided to stop buying oil from Russia. The United States is not entirely dependent on Russia for gas, but it was still enough to cause prices to spike.
This is why a standard credit card may be better than a gas credit card
In response to these price increases, some people have tried to drive less or drive more fuel-efficient vehicles. Another option is to get a gas credit card, which is a card that reduces the price of a gallon of gas by 5 to 10 cents. It sounds tempting, but when you do the math, a standard credit card can actually save you more money when gas prices are high.
Indeed, a standard credit card usually offers a cashback bonus, often up to 5%. When gas prices are high, 5% will equate to savings of more than 10 cents on a gallon. For example, with the current national average gas price of $3.92 per gallon, filling a car with a 15 gallon tank of gas means you will need to spend $58.80.
If you bought those 15 gallons of gas with a credit card that gives you 5% cash back, you’ll save $2.94. Meanwhile, a gas card that discounts 10 cents a gallon would only save you $1.50. This means that a standard credit card would save you almost twice as much money as a gas credit card.
Here are some examples of gas credit cards
That said, gas credit cards have the advantage that they are usually very easy to obtain. However, it is a blessing and a curse. Gasoline credit cards are usually offered by the gas station companies themselves, and they are usually only valid when used at that company’s stations. Also, while there’s usually no annual fee, they’ll likely have high interest rates, and some even have a limit on how much gas you can buy.
An example of a gas card is the BP credit card, which is only valid at participating BP and Amoco stations. It reduces gasoline prices at these stations by 10 cents per gallon and offers owners a 3% discount on groceries and a 1% discount on other purchases. On the other hand, there are many standard credit cards in the market. Costco or Sam’s Club cards can be a good idea. Costco has 4% cash back, while Sam’s Club has 5%.
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