A gas credit card is a card issued by the credit card company which you can use to earn cash back rewards on gas. It is not the same as the prepaid card that the gas station offers. The gas prepaid card usually only let you enjoy discounts when you purchase gas at a gas station chain. Gas rewards credit card, on the other hand, allows you to enjoy cash back no matter which brand of gas station you go to purchase the gas.
Gas rewards credit card will give you a few percentage of cash back when you purchase gas. For example, the Blu Cash Preferred from American Express offers 3% cash back on gas. This type of card also allows you to enjoy cash back when you spend on other category of purchases. One advantage of using a gas rewards card to pay for your gas purchase is that it allows you to track your fuel expenses. At the end of the month, they will send you a statement that shows you an overview of what you have spent on and the amount in that month.
The cash back which you have accumulated can be redeemed as a gift card or statement credit. Before signing up, make sure you check what you can exchange with the cash back rewards you have accumulated. You are to choose the card with the lowest APR. Better yet, if you can find a card with zero percent intro promo, you can avoid paying interest on your purchases for a certain period (6 – 21 months).
You’ll need to calculate how much rewards you can expect to receive from the card in a year. The amount of rewards you receive must exceed the annual fee. Besides the cash back, you can also receive other types of rewards such as sign up bonuses and additional perks like free FICO score, travel insurance and concierge service.
A gas rewards credit card is a better offer than a gas prepaid card if you can get approved for it. By signing up, you don’t have to apply for a separate prepaid card for gas purchases. This can reduce the number of credit card accounts that is opened on your credit report. Gas rewards credit card will help you save money on gas especially when gas at the petrol station is getting expensive.
When you receive your gas card, make sure you use it responsibly and pay the balance in full every month. Ideally, you should maintain a credit utilization of 10% – 30% of the credit limit. You can check your credit score after 1 year and you should find your credit score higher this time.