Gas is one of the most important commodities in life right now, and until society truly transitions away from gas-powered cars, high gas prices will affect everyone. Thanks to recent global events, gas prices have climbed once again, and many folks are turning to gas credit cards in an effort to save a little when they’re filling up. This may be a bad idea compared to using a standard credit card, and here’s why.
Why have gas prices started rising in October again?
As Consumer Reports wrote, gas prices are rising nationally again, and as of Oct.10, 2022, the national average for a regular gallon of gas was $3.92. In California, gas is already past $6 a gallon. The main reason for this most recent hike in gas prices simply comes down to OPEC and Russia deciding to cut oil production.
As with earlier in the year, their decision to cut oil production led to higher prices that customers have to pay. On top of that, earlier this year, Russia invaded Ukraine, and as a response, the U.S. and many other countries decided to stop buying oil from Russia. The U.S. doesn’t fully depend on Russia for gas, but it was still enough to cause a price spike.
This is why a standard credit card may be better than a gas credit card
In response to those price hikes, some folks have tried driving less or driving more fuel-efficient vehicles. Another option is to get a gas credit card, which is a card that slashes 5 to 10 cents off the price for a gallon of gas. That sounds tempting, but when you do the math, a standard credit card can actually save you more money when gas prices are high.
This is because a standard credit card typically offers a cash-back bonus, often up to 5%. When gas prices are high, 5% will equal larger savings than 10 cents off a gallon. For example, with the current national average gas price of $3.92 a gallon, filling up a car with a 15-gallon gas tank will mean you’ll have to spend $58.80.
If you bought those 15 gallons of gas with a credit card that gets 5% cash back, then you’ll save $2.94. Meanwhile, a gas card that shaves 10 cents off a gallon would only save you $1.50. That means a standard credit card would save you almost twice the money that a gas credit card would.
Here are some examples of gas credit cards
That said, there is a benefit to gas credit cards, which is that they’re usually very easy to qualify for. However, that is a blessing and a curse. Gas credit cards are typically offered by the gas station companies themselves, and they’re usually only good when used at the stations of that company. Additionally, while there usually aren’t any annual fees, they will probably have steep interest rates, and some even have a limit on how much gas you can buy.
An example of a gas card is the BP Credit Card, which is only good for participating BP and Amoco stations. It slashes gas prices at those stations by 10 cents a gallon and gives owners a 3% discount on groceries and a 1% discount on other purchases. On the other hand, there are a lot of standard credit cards on the market. Cards from Costco or Sam’s Club can be a good idea. Costco has 4% cash back, while Sam’s Club has 5%.