Table Of Content
What Is A Gas Credit Card?
As the name suggests, one of the main features of gas credit cards is that they provide rewards, such as cashback and discounts, when you spend money at gas stations.
There are two types of gas credit cards:
- Branded gas station cards – Those cards typically offer discounts and other rewards with one chain of gas stations. In most cases, the gas station offers a fixed discount for each gallon purchased.
- Rewards credit cards with rewards on gas purchases – Those are rewards cards that offer increased cash back or points when you spend money at gas stations.
Those two categories are similar in that they both reward you for spending money on gas. However, the choice between those two would depend on whether or not you are loyal to one gas station brand or prefer to visit different gas station brands.
Another important consideration with branded gas credit cards is that, as the American Express website explains, the approval process, in this case, is more straightforward than with regular credit cards.
Therefore, branded gas credit cards might be a viable alternative if you do not have a good credit rating and have a hard time getting approved for a credit card.
Gas Credit Card Requirements
To apply for a gas credit card, you need to provide your personal information, such as full name, address, and birth date.
After that, you have to write down your monthly income by dividing your annual income by 12. Like other types of credit cards, you must provide income proof.
In the case of branded Gas cards, the requirements are more lenient in terms of credit score. Therefore, you might be approved with a fair credit rating as well. However, a FICO score of 580 or below is considered poor, which would limit your options for getting credit cards.
Are Gas Credit Cards Worth It?
Just like any type of credit card, gas credit cards do have a number of advantages and disadvantages to consider before applying, here are some of those:
Discounts On Gas
Limited Rewards On Branded Gas Cards
Extra Cash Back Or Points
Higher interest rates
Easier Approval Process
The most apparent advantage of gas credit cards is that they typically offer discounts at a gas station.
For example, if a gas credit card offers customers to save 20 cents per gallon, this can add up to $20 in savings for 100 gallons.
This might seem small, but over time, those savings can add up to a significant sum of money.
Besides some discounts, many gas credit cards offer a higher percentage of cash back, typically 3% to 5% when you spend money at gas stations.
In the case of points credit cards, they might offer several times more points, when you use your card to buy gas.
This benefit mostly applies to branded gas credit cards. Here, the credit score and other requirements are more lenient in most cases.
Therefore, if you do not have a good or excellent credit score, you might still qualify for this type of credit card.
Despite those upsides, we discussed above, gas credit cards do have a number of downsides as well, such as:
In the case of branded gas credit cards, you can earn potential rewards, mostly limited to discounts or cash back at a gas station.
So if you are looking for rewards in other spending categories, you might consider another type of credit card.
However, this drawback does not extend to a general-purpose rewards card that offers cash back on gas purchases since, in this case, there are usually many options to choose from in terms of rewards.
Some branded gas credit cards have higher interest rates, compared to other types of credit cards, something going as high as 26%.
Yet, it is worth keeping in mind that you can avoid paying any interest if you pay your balance in full by the end of the statement period.
How To Choose Gas Credit Card?
If you think that a gas credit card can work for you, there are several things to consider when choosing this type of credit card:
The first logical step when choosing a gas card is to decide what type is best for you. As explained above, you can get a branded gas credit card or a general rewards credit card that offers some cash back or extra points on gas.
Generally speaking, a branded gas card might be a good idea if you are looking for only rewards for gas purchases.
On the other hand, if you want a choice of rewards with different spending categories, it might make more sense to go for a general rewards credit card.
Many branded gas credit cards indeed have no annual fees. However, several general-purpose rewards credit cards can have an annual fee. So, in this case, you have to decide.
The first option is getting a no annual fee credit card and saving money. On the other hand, some people might prefer investing some money in a rewards credit card with an annual fee that offers more generous rewards.
When choosing a gas card, it is important to compare what percentage of your expenditure on gas will be returned to you in the form of cashback.
So, for example, if you spend a considerable amount of money on gas, having a credit card offering 5% cash back on that category can have a significant financial benefit.
Some gas credit cards offer generous cash-back rates, but many of them have an annual limit on how much cash back you can earn on those gas purchases.
So, for example, if you spend $3,000 on gas per year, it might be better to choose a card with a rewards cap of $3,000 or higher.
How To Maximize Gas Credit Cards?
If you want to make the most of your gas credit cards, then there are some tips, which might be helpful in maximizing potential rewards:
- Cash back on several categories – Nowadays, there is an increasing number of gas credit cards that offer not only fixed cash back on gas but also other categories, such as groceries, dining and travel. So if you choose one of those credit cards, then you will earn rewards not only on your gas purchases but on other categories as well.
- Statement credits – Some rewards credit cards, that offer increased cash back on gas, also offer a specific amount of statement credit when you spend a specific amount of money using this card. Consequently, with those cards, you can earn bonuses alongside with rewards for your gas purchases.
- Insurance coverage benefits – Some rewards credit cards that offer decent cash back on gas, also offer car rental loss and damage insurance. This means that when you use that credit card to get a car rental, in the case of theft or damage, the credit card company might pay you some compensation.
- 0% APR Offers – Some credit cards that offer increased cash back on gas, also have 0% introductory rates for a specific period, typically ranging from 6 months to 2 years. You can transfer your balances to this card and save some money on the interest expense.
Do Gas Cards Build Credit?
Most gas credit card issuers report to the three major US credit bureaus. As a result, your payment history as well as your credit utilization ratio will have an impact on your credit score.
In this case, we can see that branded gas credit cards have some similar benefits to secured credit cards.
Since the typical requirements on those cards are relatively more lenient, then you might obtain that card even if you have an average or poor credit rating. You can then improve your credit rating by making those monthly payments on time.
When It May Not Make Sense To Choose Gas Credit Cards?
Despite all of the benefits of gas credit cards, it is fair to say that they might not be helpful for everyone. Here are some of the cases when they might not be beneficial:
- You do not drive that often – If you mostly use public transport and do not drive that often, having a gas credit card makes very little sense since you can not use the benefits they offer. In this situation, it might be better to find a credit card that offers the rewards you use.
- You want to earn rewards on non-gas categories – You might want to earn rewards that have nothing to do with fuel, such as travel, supermarkets, or clothing. In this case, finding a card that offers cash back or extra points on those other categories might be better.
- You want to earn cash back on all your purchases – If you're going to earn with all of your purchases, then focusing on a gas credit card might not be the best idea. Instead, a number of reward cards offer a fixed percentage of cash back on all of your spending, and it might be better to get one of those.
Gas Credit Cards Alternatives
If you think that gas credit cards are not the best choice, some alternatives are worth considering. Here are some of those:
- Travel credit cards – If you frequently travel, then a travel credit card might be more beneficial for you than a gas credit card. This is because people typically spend much more money on their trips than at the gas station.
Travel credit cards allow you to earn travel rewards, such as free airline tickets and car rentals. In addition, with those cards, you usually earn several times more points when you spend money on travel-related categories.
- Cash-back credit cards – This can be a good option if you want to earn rewards with your spending instead of focusing on your fuel expenditure. Those cash-back cards return a certain percentage of your spending to you.
This can be in the form of statement credits or direct deposits to your checking or savings account. In addition, some cash-back cards allow you to choose a category, giving you a higher percentage of cash back for your purchases.
How to apply for a gas credit card?
In the case of branded gas credit cards, you can usually apply for them at the gas station or online.
On the other hand, if we talking about rewards credit card that offers some extra cash back or points on gas, then you can typically apply for those at the bank branch, or by using an online or mobile application.
Can I get a gas card with no credit?
Usually, this is not possible. Branded gas credit cards require a fair credit score in most cases.
As for rewards credit cards, the demand is for higher score in most cases – one way to go about it is to get a secured credit card, that can allow you to establish your credit and in some cases, earn some rewards along the way.
Can I get a gas card with poor credit?
Rarely, you can get a gas card even with poor credit because some branded gas credit cards do not have strict requirements. However, in most cases it's not possible.