The price of gasoline has recently reached record highs in California, but the Golden State isn't the only place where motorists are taking a hit from rapidly-rising fuel prices. Drivers all over the U.S. are finding that fueling up their vehicles seems to cost more each time they go to their local service station.
You may be able to make a small dent in your gasoline costs by using your credit card and taking advantage of some special offers. Here are a few ideas to help you get started.
During certain periods of the year, rewards credit cards may give you the opportunity to earn double or triple points, cash or other rewards on what you buy in certain categories, including gas purchases.
The savings opportunities usually change every quarter, and may not be the same from year to year. Plus, the extra savings is not always automatic; you may need to sign up for them. Watch for information in your credit card statements and/or special mailings from your bank.
If you have more than one rewards card, you may find that switching the card you use to purchase gasoline every quarter will provide the most savings on your tank of gas.
The rewards you earn by using gasoline credit cards vary considerably from company to company. Some may offer you a five cent, 10 cent or even greater discount on each gallon of gas you buy, provided you buy a certain number of gallons each month. (They also cap the number of gallons that qualify for the discount.) Other cards may link your savings per gallon to the total amount you charge to your account each month (not just how much gas you buy). Some may offer you no special deals on gas, but do provide other types of rewards.
Before you sign up for any gasoline credit card, make sure that you fully read and understand the terms and conditions of the offer and the benefits that you will receive. You should also check to see if there's an annual fee or an application fee for the card-will you save enough money on your gas purchases to make up for those costs?
Many gas stations today charge one price for credit purchases and a lower price for cash purchases. So if you're saving five cents a gallon every time you use your gasoline credit card-but also paying several cents more per gallon than a cash customer-you might find that you're really not saving any money at all.
Consider using your rewards credit card to buy gasoline gift cards. Gas gift cards are treated like cash, so while you won't get a cents-off reward at the pump, you will be able to earn cash back or other rewards.
Look at what you save each month by using a credit card for your gasoline purchases. Compare that to the interest you're paying when you carry a balance. It's clear that the only way to come out ahead on your credit card gasoline purchases is paying off your credit card account each month.