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using credit cards for gas?

Frequent Contributor

using credit cards for gas?

Is there even a point to use a credit card to buy gas? For the gas stations around me, they always charge a much higher price for those using credit cards, and wouldn't that just cancel out any awards earned than if I had just paid for gas with cash?
Message 1 of 40
39 REPLIES
Valued Contributor

Re: using credit cards for gas?


subwaysandwich wrote:
Is there even a point to use a credit card to buy gas? For the gas stations around me, they always charge a much higher price for those using credit cards, and wouldn't that just cancel out any awards earned than if I had just paid for gas with cash?

What's the difference per gallon? 

 

For e.g. current prices where I live are about $3.50, so unless I see at least a 18 cent reduction, I won't pay cash Smiley Happy For convenience, I'd keep the threshold at about 20 cents discount.

Message 2 of 40
Frequent Contributor

Re: using credit cards for gas?

It's usually like 10 cents more just for using credit card
Message 3 of 40
Valued Member

Re: using credit cards for gas?

I’ve wondered about this too but found its worth it if you do the math.  I guess it really depends on how much more it is to use a credit card – around here it is usually only a 10 cent/gallon difference.  So if you have a Chase Freedom (or something similar) which gets 5% two quarters out of the year it saves you more.  Let’s say you are charged an extra 10 cents/gallon for using a credit card.  If you buy 16 gallons you pay an extra $1.60 just to use your credit card.  If gas is $4/gallon that is $64. 5% of that is $3.20 – more than the extra you are paying to use your credit card. Even a card that gets only 3% back (more common) would be better by 30 cents under that scenario.

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Message 4 of 40
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Valued Contributor

Re: using credit cards for gas?


subwaysandwich wrote:
It's usually like 10 cents more just for using credit card

So while that's a pain, at 3.50 (3.60 for credit), I still come out ahead using credit on my SM, or for this quarter Discover It/Freedom (I come out VERY ahead on Freedom this Q for gas), since I'd be effectively getting a 18 cent/gallon discount using SM or IT

Current cards: MSUFCU Platinum, Amex PRG, Amex Surpass, Amex BCE, Citi Prestige, Citi Double Cash, Citi Premier, US Bank Cash +, Huntington Voice, AAviator, Sallie Mae, Discover IT, Chase Freedom TU:753 EQ Enhanced: 758
Message 5 of 40
Established Contributor

Re: using credit cards for gas?


subwaysandwich wrote:
It's usually like 10 cents more just for using credit card

Theres no difference by me for paying with a card so I guess its worth it for me.  Currently gas is sitting at $3.64 so a tank of gas earns me just under 3 bucks on my Discover or Sallie card.  Adds up fast for summer months when I feel like I'm constantly filling up. 

Message 6 of 40
Moderator

Re: using credit cards for gas?


subwaysandwich wrote:
It's usually like 10 cents more just for using credit card

If you pay $4 a gallon and used a CC that got 3% cash back for gas, you'd be getting 12 cents a gallon, which would offset the price difference.   The gas stations here that have a difference usually keep it less than 10 cents, so it works out well for me.   However, if you don't have a CC with decent gas rewards, you could always get a gas card for the station you frequent most often; gas stations tend to charge the cash price for their own CCs.

 

I think aside from rewards, you're much safer using a CC at a gas pump.   If your card ever got skimmed from one of those in-pump readers, it's much better to have a CL compromised instead of a bank account.  Cash is fine, but CC is certainly faster.  



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Message 7 of 40
Mega Contributor

Re: using credit cards for gas?


sportsguy83 wrote:

I’ve wondered about this too but found its worth it if you do the math.  I guess it really depends on how much more it is to use a credit card – around here it is usually only a 10 cent/gallon difference.  So if you have a Chase Freedom (or something similar) which gets 5% two quarters out of the year it saves you more.  Let’s say you are charged an extra 10 cents/gallon for using a credit card.  If you buy 16 gallons you pay an extra $1.60 just to use your credit card.  If gas is $4/gallon that is $64. 5% of that is $3.20 – more than the extra you are paying to use your credit card. Even a card that gets only 3% back (more common) would be better by 30 cents under that scenario.


And if you use Freedom as UR points, with a transfer card, the points are worth more than 1c, so it is even more worthwhile.

Message 8 of 40
Established Contributor

Re: using credit cards for gas?


PlasticOrPlastic wrote:

subwaysandwich wrote:
It's usually like 10 cents more just for using credit card

Theres no difference by me for paying with a card so I guess its worth it for me.  Currently gas is sitting at $3.64 so a tank of gas earns me just under 3 bucks on my Discover or Sallie card.  Adds up fast for summer months when I feel like I'm constantly filling up. 


Same way here, same price either way. It's worth it, but I only spend about $140/month on gas

NFCU CashRewards $13.5k | AMEX BCE $15k | Lowes $17k | Sportsmanss guide $7.6k | Chase Freedom $1k | Discover IT $4.4k |
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Message 9 of 40
Established Contributor

Re: using credit cards for gas?

Just curious where do you guys live that they charge 10 cents a gallon to use credit?  That seems insane to me....

Message 10 of 40