How a new credit card could help you cope with rising gas prices
Does your card reward you for gas purchases?
- Gasoline prices have recently reached record highs.
- A credit card could help offset some of the costs.
- You’ll want to look for a card that offers bonus rewards for gas purchases.
Gasoline prices hit a new record, with the national average price now above $5 a gallon for the first time. And unfortunately, things are likely to get worse as prices are expected to continue to climb in the coming months.
Since it’s now so expensive to refuel, it wouldn’t be surprising if you struggled with travel costs. But the good news is that a new credit card could help cover at least some of those extra expenses, making it easier to manage the high cost of gas.
How can a credit card help you cope with rising gas prices?
As gas prices climb, it will be more important than ever to use the right credit card to pay at the pump.
Indeed, some credit cards offer additional bonus points, miles or cash back if you make purchases at gas stations. In contrast, other cards may offer cash bonuses for other types of expenses, such as restaurants, but do not offer you additional rewards for filling up your vehicle.
Since gasoline prices are much higher than they have been in the past, the extra rewards could have a big impact. Say, for example, that you use about 560 gallons of gasoline per year, which is a reasonable estimate of how many gallons the average person uses.
If gas costs around $5 a gallon and you use 560 gallons per year, that could mean spending around $2,800 per year at gas stations. If your credit card only offers 1% back on gas purchases, you’d end up with about $28 a year in card rewards.
But if your card offers a 5% discount at gas stations, you could end up with total rewards of around $140 – assuming the bonus rewards apply to all gas purchases throughout the year. That’s a lot more money back in your wallet by changing the card you’re using.
Should I subscribe to a petrol card?
Now, the example above is just a guess, and you’ll need to consider several different issues when deciding whether to get a gas credit card.
First, you will need to research card options and see if you can be approved for one that offers bonus fuel rewards. You will also want to read the fine print, for example if there is a limit to the amount of eligible expenses for the bonus. Finding the right gas card will be key to earning rewards generous enough to offset some of your extra gas costs.
Second, you’ll want to think about how much gas you’re actually using. If you drive infrequently and don’t use a lot of gas, it might not be worth signing up for a gas card because the extra rewards won’t earn you much.
Finally, you’ll want to compare the rewards your new card will offer to your current card – and also compare other expenses such as annual fees. If you find that you can do better and be more rewarded with a new card, there’s generally little downside to applying as long as you don’t mind an investigation into your credit report for a few years. The extra rewards will quickly add up with the high price of gas, and the bonus granted by your card issuer helps to at least reduce your gas expenses a little during these unprecedented times.
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