An often overlooked aspect of personal finance is the value of gas credit cards. These cards offer rewards, credits and discounts on gasoline and purchases made at gas stations. Whether you're a road trip enthusiast, a daily commuter, or a professional driver, a gas credit card could potentially save you hundreds of dollars each year.
To learn more about the benefits gas credit cards offer, as well as how you can use them to strategically save and improve your overall finances, continue reading. Below is a brief overview of what this article covers:
- What Are Gas Credit Cards And What Benefits Do They Offer?
- Terms And Conditions You Need To Know For Gas Credit Cards.
- Comparing The Best Gas Credit Cards In Canada.
- Tips On How To Choose A Gas Credit Card
- Tips On How To Maximise Your Gas Credit Card Benefits
What Are Gas Credit Cards?
So, what exactly are gas credit cards? These are specialized credit cards that offer rewards or cashback on gasoline purchases. They can be especially valuable if your monthly gas expense is high. They come in two types:
- Branded. Branded gas credit cards are partnered with specific gas stations and usually offer higher rewards when you fill up at their pumps.
- Generic/general purpose. Generic gas credit cards offer rewards on gas purchases regardless of the station where you fill up.
The one you choose will depend on your driving habits. Do you prefer going to only one brand of gas station, or do you only fill up at the gas station near your house? Then a branded gas credit card makes sense. If brand doesn’t matter to you, or if you tend to travel around, then a generic brand will suit you better.
The generic option offers more flexibility to adapt to changing gas prices or for frequent travellers. However, it may come with fewer benefits than a branded gas credit card. Regardless of which gas credit card you choose, you can make the most out of it and earn rewards, as this article covers later on.
The Benefits Of Gas Credit Cards
Gas credit cards offer numerous benefits to help you save more on gas and other purchases. The benefits include:
- Saving on gas: Most gas credit cards offer between 1% and 5% cash back on gasoline purchases. This might not seem like a lot, but if you're a frequent driver, these savings can quickly add up over a year.
- Saving on other categories: Gas credit cards can function like regular credit cards and offer sign-up bonuses, and reward points for groceries, dining and travel purchases.
- Improving your credit score: Much like standard credit cards, gas credit cards help you build your credit score. Since gas is a monthly purchase, if you pay it fully each month, it builds up a steady positive credit history.
A simple stop at the gas station can add to your financial security one card swipe at a time. However, alongside benefits, there are important terms and conditions to familiarise yourself with to ensure you know what you’re getting yourself into. The next section looks at this in more detail.
The Terms and Conditions of Gas Credit Cards
Most credit cards come with terms and conditions, and gas credit cards are no exception. The most important terms to familiarize yourself with include the Annual Percentage Rate (APR), which is the annual interest rate of your card combined with the fees you pay for getting a loan (e.g. credit), and your annual fees.
Other terms and conditions to watch out for include late payment fees (a flat rate you might pay for settling your balance late, rather than paying interest), foreign transaction fees (fees for using your card abroad), and the actual reward offered by your credit card.
When getting any Credit Card, always make sure to read through the terms and conditions carefully to make sure you’re equipped for whatever fees or rewards may come your way.
Comparing the Best Gas Credit Cards
With so many gas credit cards in the market, choosing the best one can be a daunting task. To make this choice earlier, a few of the most popular gas credit cards in Canada are outlined alongside their reward structures and fees. The cards are divided into two categories - Generic and Branded.
Generic Gas Credit CardsSimplyCash® Preferred Card from American Express: This Card offers 4% cash back at Canadian gas stations, 4% cash back on groceries and 2% for everything else. While ideal for Gas purchases, it also has excellent rewards for groceries and everyday purchases making it an ideal flexible option. Its annual fee comes to $119 and interest is typically 20.99% on purchases.
Branded Gas Credit CardsBmo Air Miles® Credit Card: This card is co-branded with Shell gas stations to offer cardholders more benefits. It is mainly targeted at airline miles, but each purchase at a Shell gas station earns you points and miles, such as X4 points on all Shell purchases and X2 points on everything else. It has no annual fee, and interest is 20.99% for purchases.
