Recent reports have revealed that fuel prices are rising all over the world, in fact in Britain the price is equivalent to $8.40 per gallon, not that this eases the pain of having to shell out a large percentage of our cash on gas every month.
However, studies suggest that gas rewards credit cards are the answer to lessening the burden of rising gas prices.
While using a rewards card to pay for gas at the fuel pumps can take the edge of the bill, it must be done with great caution. It is important to develop a realistic strategy and do a little comparison to ensure that you are getting the best possible deal from your rewards card. A recent study published in The Palm Beach Post highlighted the following key points when it comes to using rewards cards at the gas pumps:
1. Consumers should never take it for granted that a dedicated gas rewards card provides the best deal. It is worth looking at other more general rewards card to see what is available on the market.
2. Wherever possible, consumers should try to only use the rewards credit card for their gas if they will be able to clear the balance at the end of the billing period. If you know you will need to carry the balance forward then it makes more sense to opt for a low interest or interest free credit card since rewards cards will notoriously have a higher APR to offset the cost to the card issuer of handing out the rewards.
3. Consumers are also reminded that if their particular rewards card offers bonus rewards on certain categories then they must keep an eye on the current offers. Most card issuers will rotate the bonus categories every few months, so it is sensible to stock up on gas whenever there is a bonus on that particular purchase category.
4. Consumers should also lookout for cash discounts at their local gas station. Some gas stations do offer a cash discount, so be prepared to calculate whether the cash discount is more than the rewards you would receive. A good rule to follow is if the discount is 5 percent or more, you should pay cash as few credit cards can compete with that rate.
A recent article in The Los Angeles Times newspaper extolled the virtues of using credit card comparison websites to establish which reward card is right for you and this is some sound advice. In the article, Liz Weston used a case study where a consumer spent up to $6,000 a month on debit card and checking account payments. On comparing various credit cards, it was established that by using rewards cards it was possible to reduce this by $720 a month at least. This figure could be increased if the applicant had an exceptionally high credit rating.
The general consensus all around is that now is the right time to apply for both gas and general rewards credit cards. As card issuers compete for new customers, not only are the rewards offered becoming increasingly more generous, but there are also some very attractive sign-up bonuses for new customers. That is another reason why consumers should shop around for the best possible deal.
Some experts even suggest having 2 rewards cards for use at different merchants depending on how the rewards are offered. The Wall Street Journal recently reported that,
banks ad credit-card companies are giving out record rewards to people who sign up for their cards as competition for well-heeled customers reaches a fevered pitch. For people with good credit and money to spend, now is a good time to take the leap, experts say.