What Consumers Should Know About Gas Reward Cards

There were around 268.8 million registered vehicles in the United States in 2016, according to Statista. As electric vehicle (EV) technology is still quite new, the majority of cars on the roads are internal combustion engine (ICE) vehicles. With the average price of regular unleaded gas at around $2.90 per gallon, Americans spend a lot to refuel their vehicles. Demand for gasoline has hit an all-time high, with Americans consuming 9.32 million barrels per day. This could also lead to higher prices during the summer.

According to a Bankrate survey, 51 percent of Americans are planning to vacation this summer while 49 percent are not planning a vacation, and the majority of respondents cited financial reasons. Unemployment is low but rising gas prices still pose a financial burden.

However, according to an infographic (WalletHub’s infographic below), 50 percent of people do not consider gas prices when making travel plans. This could mean that prices for other goods and services (such as hotel rates) are rising, or that consumers’ attitudes towards the importance of gas prices could be changing.  Consumers can soften the blow of fluctuating gas prices through gas rewards cards. These cards can feature a variety of benefits, but there are many on the market.

 

 

WalletHub provides some tips for consumers choosing between a multitude of options in the market:

  • Most gas stations have company specific cards for frequent users
    • These cards usually “offer the most lucrative rewards” but these benefits are only applicable to purchases made at the specific company’s pump.
    • Consumers that do not use one specific station should avoid these if they want to have more benefits.
  • Some cards can only give users rewards for gas purchases, while others allow rewards for multiple types of purchases, or any purchase.
  • Gas rewards cards may also work using a certain number of points awarded per dollar spent or per gallon bought. Understand how beneficial rewards can be compared to other cards if the price of gas rises.
  • Pay careful attention to the amount of spending needed to gain rewards. Some cards may require several thousand dollars of spending to get a few hundred in rewards.
  • Credit score matters for most cards, look at the recommended credit score or required credit score for cards. There are options for low credit consumers.

However, some are weary of the actual benefit that can be obtained through gas rewards cards, especially those that can only be used on gas purchases. According to MarketWatch, John Ulzheimer, president of consumer education for SmartCredit.com, says “margins on gasoline sales are already so razor thin they can’t offer you 50 percent off like a clothing store could.” With so much competition in the gas market, this could be true for some cards. Consumers should always consider whether a card like this is right for their financial situation, and to always read the terms and conditions carefully to determine possible annual fees, interest rates, and whether gas points earned on these cards expire.

Photo from Pexels.com

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