What is a Gas Credit Card?
A gas credit card is one that is quite different from a prepaid card and it is issued by a gas station. With a gas credit card, you can pay for gas at the pump as you take advantage of discounts and perks that come with the card.
Using this method can help you track your fuel expenses separately which makes it easier to budget according to David Bakke a credit expert at Money Crashers.
How Gas Credit Card Work
Understand that even though a gas credit card can help you in tracking your gas expenses and in saving money at the pump, there are advantages and disadvantages that you should consider.
Gas station credit cards according to Alex Gerard, founder of CardsMix.com are very similar to store credit cards. They are often accepted at one particular gas station chain and become useless in any other store or for online shopping.
Even though limited in use, gas credit cards can be quite helpful for those who are having trouble getting approved for a traditional credit card. This is because gas credit cards tend to be easier to get approved for than rewards credit cards.
It may also be a great option for those with fair credit who are looking to rebuild or establish their credit. Additionally, it is difficult to overspend on a gas credit card because it’s not accepted outside the gas station.
Apart from the fact that gas credit cards have an easier approval, they often come with high-interest rates.
What to consider before applying for it
Gas credit cards can reward loyal customers with the offer of discounts and fuel credits. A fuel credit may be applied as a statement credit, which effectively saves you money. But the downside to this is that you may have limited use with these cards. Thus you have to ensure that the gas station you get it. From is easily accessible and is one that fits your lifestyle.
Also, note that gas stations sometimes offer. Discounts for paying with cash. So before you apply for a card. Check the terms to see if there’s an additional fee to pay at the pump. Understand that if there is. It could negate some of the rewards.
Apart from saving consumers money at the pump. A gas rewards credit card offers even higher returns. Gas rewards credit cards, unlike gas credit cards that are. Distributed by gas stations are traditional credit cards. That offer points or cashback on gas purchases.
According to Gerard “if you don’t have any problems. Getting approved for traditional credit cards. You may find that general-purpose credit cards that come with gas rewards offer a better value”. Today, “earning 3 to 5% rewards on gas is a possibility”
If you are looking to improve your credit, you might as well start with a gas credit card. This is because it may be easier for you to get approved for a gas-branded credit card, and you’ll have fewer opportunities to racking up debts. But if your credit is in good shape and you make your payment in full, a gas rewards credit card may be a better option for you.
Even though it looks like regular credit cards on the surface, there are quite some differences. The first being that where you can use them is quite limited.
So even though gas credit cards might be good for those who are looking to build credit, they may not be as reward-friendly as traditional cards.
Before you go ahead and apply for one, it’s best you weigh the costs, the pros and cons to choosing the card that fits best.