Gasoline Credit Cards Can Save You – Or Cost You Big

 


Visitors: 272

Credit cards that offer a rebate on gasoline purchases are the latest marketing push from most major credit card companies. More than 20 million direct mail pieces touting the benefits of gasoline rebate credit cards will find their way into the mailboxes of American consumers this year. Television, radio and print advertising expenditures for this rebate campaign are also expected to be much higher this year.

Are these gasoline credit cards a good deal for consumers? Should you bite at the latest Discover or Chase Perfect Card rebate offer? Probably “Yes” but only if you pay-off the entire credit card balance on-time each and every month.

If you fill up a 20 gallon tank once a week at $2.90 per gallon with a 5% rebate credit card that would bring your actual cost per gallon down to about $2.76 per gallon. But that’s only if you pay-off the entire balance.

Interest rates on these gasoline credit cards range anywhere from around 14% to 34%. Most are adjusted to the prime rate and would climb even higher if the Fed continued its present trend of rate increases. Even at the low end of the range, if you carried the balance for one month’s gas purchases for a year, your actual cost per gallon for that month would have been around $3.30 per gallon. If you missed the credit card company’s payment date that month and got whacked with a late fee, your cost per gallon for that month would have been around $3.79 per gallon. If the addition of the $39 late fee to your balance kicked you over the card’s credit limit and you added the $35 over limit charge, your cost per gallon for that month goes up to about $4.23 per gallon.

With any credit card offer the small print is everything. The grace period for paying credit card bills, now around 20 days, keeps getting shorter. The Universal Default provision buried deep in the credit card company’s contractual language could allow the credit card company to raise the interest rate on your credit card account with them if you bounce a check at the grocery store, or are late or miss a payment on another, completely unrelated, credit card or maybe even your utility bill.

Many of these gasoline rebate cards offer attractive introductory rates that become less so after three months, or restrict the best rebate to certain brands of gasoline, or charge an annual fee if you do not use the card frequently enough. Almost all the gasoline rebate card offers are joint ventured with specific gasoline retailers. Shell and Citibank, Chase and Marathon, RBS National Bank and Kroger to name a few. Not every gasoline retailer has a station on every corner. Check to see if the rebate offer is limited to a specific geographical region. For example, the Citi AAdvantage card offers double miles on gasoline but only to card holders in Miami and the New York tri-state area.

Peter Boston is an attorney, writer, and netrepreneur who contributes to Profacere.com an information and resource center for loans, credit cards, credit scores, and consumer credit issues, and to the Profacere Blog .

(542)

Article Source:


 
Rate this Article: 
 
Airline Credit Cards - The True Cost Of Using Them
Rated 4 / 5
based on 5 votes
ArticleSlash

Related Articles:

Paying Your Credit Cards Late Can Cost You - Big Time

by: Jeanette Joy Fisher (December 13, 2005) 
(Finance/Credit)

Auto Gasoline Cards Compare Gas Rebate Credit Cards

by: Ashley Jane Summers (July 23, 2008) 
(Finance/Credit)

Gasoline Credit Cards

by: Oge Nwaozuzu (March 07, 2008) 
(Finance/Credit)

Save Money on Gasoline - Two Ideas For Big Savings on Fuel

by: Edward Young (September 14, 2008) 
(Automotive)

Record of Top Rated Gasoline Credit Cards - 2011

by: Reg Irwy (August 03, 2011) 
(Travel and Leisure/Airline Travel)

Car Fuel Saver Device - Convert Your Car to Run on Water to Save Gasoline Cost

by: Will Yap (September 27, 2008) 
(Automotive)

Gas Station Credit Cards - Which Credit Cards Will Save You the Most Money at ..

by: William Perry (September 08, 2008) 
(Finance/Credit)

You Have All Heard of the Big Name Credit Cards

by: Ken Bissonette (December 18, 2005) 
(Finance/Credit)

Look Out! The Cost of your Credit Cards may be Increasing Dramatically!

by: Douglas Hanna (December 01, 2005) 
(Finance/Credit)

Airline Credit Cards - The True Cost Of Using Them

by: Robert Alan (February 11, 2008) 
(Finance/Credit)