Learn the Benefits and Drawbacks of Gas Credit Cards

Drawbacks of Gas Credit Cards

While gas station gift cards may seem like a good idea when trying to cut costs, there are a number of drawbacks to think about. The most significant limitation is that some gas station credit cards can only be used at that specific location.

The following are some additional drawbacks to using a credit card for gas purchases:

• Exorbitant annual percentage rates (APRs): Several gas credit cards charge APRs of 29.99% or more. Paying down your bill in full each month is the only way to avoid accruing interest charges. It’s wise to look into cards with substantially lower APRs if you need to occasionally carry a debt.

Some credit cards that provide points for gas purchases have annual restrictions on the total amount of rewards you can accumulate. After reaching this threshold, your gas rewards rate will drop to 1%. What you can do with your prizes is a crucial consideration for limited reward programs.

In the case of some gas credit cards, the only prize you can “redeem” is a discount on gas purchases. Depending on the program, you may be able to redeem points for things like statement credits, gift cards, or even trips.

Is It OK for You to Use a Credit Card for Gas?

A gas credit card can be a valuable tool if you want to earn rewards each time you fuel up. However, the interest you’ll pay can add up fast if you don’t pay your balance in full each month. It’s important to have a plan in place to avoid falling into debt before applying for a gas station credit card.

Also, make sure you know which type of card you want—a regular rewards card or a store credit card from a gas station. If you only want a discount on gas purchases, a store card may work just fine. If you want to earn rewards on everything you buy, on the other hand, consider a general rewards credit card you can use for regular purchases and bills.