With the insanely high prices at the pump, I’ve been asked by more than one person what are the best credit cards for gas only (in other words, not major credit cards that can be used everywhere).
The answer? Most downright suck!
Reason #1: Rewards are pathetic or non-existent
Rewind back a decade ago and gas station cards used to be among the best for fuel rebates. Some would offer 2-10 cents off per gallon… and back when gas was only two bucks a gallon, that was a significant savings, percentage-wise.
Now most don’t even have a rewards program! They’ve either totally eliminated them (so you’re earning no rebate at all) or what they give you is pathetic. Take the Valero gas card as an example. After the first 3 months (the signup promotion) in order to earn gas rewards, you have to pay a $10 annual fee to get the Gold version – and even then – the rebate is miniscule:
Think about it… if you were just using a normal Visa/MasterCard with 1% cash back, on $4 gas you would have earned 4 cents per gallon. Look how that compares to this station’s gas-only card program!
On the other hand, the top-rated gas cards will give up to 5% at all stations. Isn’t the choice a no-brainer?
Reason #2: You’re confined to one brand of gas
The biggest drawback of a gas only credit card is that it will only work with the associated station. You won’t be able to use it elsewhere.
Now if the card actually gave good rewards (like 3% to 5% rebates) then that might be okay, because the benefits would outweigh the drawbacks. But if you’re not getting rewards – or only low rewards – why do you want to be confined to one station? Then you will be at the mercy of their price, regardless of whether or not they are the cheapest station that day.
Reason #3: Limited use for building credit
If you have bad credit, then getting approved for a major credit card can prove to be a difficult task. In that scenario, getting gas cards for gas only does makes sense… since they are easier to get approved for, you can use them as a stepping stone to establish or re-build your credit.
But be careful, because if the only thing on your credit report are store and gas cards, then you’re going to have a hard time convincing grade “A” issuers like Chase, Citi, AmEx and others to approve you for a good card.
So while it’s true that a gas-only account can be useful for building credit, you’re still going to want Visa or MasterCard credit cards to rebuild credit, too.
Reason #4: Outrageous APRs
Take a look at the APR on a gas station card application and don’t be surprised if it’s in the 22-27% range. For example, the Shell “Drive For Five” application listed this:
A pretty outrageous interest rate, especially considering how few benefits you get with the card.
Reason #5: Tricks, not treats
Make no mistake about it… all credit cards (including the more respected ones) will no doubt have people complaining about them. However out of all the card types, those from gas stations are among the most complained about on CreditCardForum.
Why? Well aside from usually having subpar customer service, many people are just fed up with the tricks that are all too common with them.
For example, with the Shell “Drive For 5” gas only card, you do have the ability to earn 5 cents per gallon (note: that’s 5 cents, not percent). But take a look at the fine print:
So if you don’t buy more than 45 gallons per month, you won’t get it. And even if you do meet that threshold, a 5 cent rebate when gas is $4.00 only equals 1.25%. Hardly a reason to jump for joy.
Generally speaking, the cards that you can only use at gas stations are for suckers. Unless your credit is shot, there’s no reason to apply for these inferior offers.
Written or last updated for 2013