Gas company credit accounts are easier to qualify for than a standard Visa or MasterCard through a large lending institution.
If you have not yet established much credit with the credit rating agencies, the gas card may be a good place to start. However, if the company issuing the credit account does not report regularly to credit bureaus it may not help build credit to use such cards.
Some gas credit cards can save you money on your fuel purchases. Major gas retailers often give 3-5% discount for those who purchase fuel with their company’s credit card.
This may be in the form of a direct price reduction but is more likely to be cash back incentive card where the rebate builds and then can be applied to your bill or to special merchant offers through the gas company’s website.
What Are The Best One’s?
Discover Card, Chase Bank and Capital One all offer credit cards that have a special incentive applied to purchases of gasoline. The upside of using these major cards is that they can also be used for other purchases and are not limited to fuel.
However, that means you must be able to qualify for them just as you would for any major credit card. If you have not yet established a credit history or if you have bad credit, this might not be a possibility for you.
Chevron and Texaco offer gas cards that are fairly typical of this type of credit account. The standard credit card can be used at both Chevron and Texaco stations.
There is an introductory credit of 10 cents per gallon of gas purchased for the first 60 days for new card holders and some may qualify for a cash access component.
A premium gas card offers discounts on car rentals, hotels rooms and travel insurance as well as 5% rebates on gas purchases. The premium card does carry an annual fee of $25.
If you can qualify for a regular credit card account the Chevron-Texaco Visa may be your choice. This is a great option for savings with an ongoing 10 cent per gallon fuel credit and no annual fee.
The Downside
Interest rates on credit cards offered by specific gas companies are usually higher than rates of regular credit cards such as Visa and MasterCard.
If your goal is to enhance your credit rating while adding a financial management tool, the gas card is a good choice. If you pay the bill in full each month you will avoid high interest charges.
Unless you have an unusual amount of travel during a certain time period, this monthly payment in full should be the norm for gas accounts.
With interest rates of up to 20% for most users, gas credit cards are not inexpensive if you carry a balance from one month to the next.
Usually if you want the full rebate amount offered by the gas company on their card you need to buy fuel at one of their stand alone filling stations. If you frequent a discount or warehouse club that offer gas you may find the rebate amounts greatly reduced.
The Conclusion
If you learn the things you should know about gas company credit cards you can get a significant cash back or credit amount on the gas purchases you make.
In a time when gas prices seem to be constantly increasing the ability to shave 10 cents per gallon off the price is a significant incentive to buyers.
To reap the benefits of gas company cards you should pay the bill in full every month as much as possible to avoid high interest charges that can wipe out your fuel savings.
For convenience of use and to help build your credit file, a gas company credit card is one of the easiest credit accounts to qualify for.
P.S, don’t miss our guide on how to find the best reward programs and where to start your research.
