Gas Card Rewards Interview with Compass Media Networks
CreditCards.com Senior Industry Analyst Matt Schulz spoke on Thursday, March 19, 2015, with Gordon Deal of Compass Media Networks about the results of the March 2015 Gas Cards Rewards survey. The interview and transcript are below.
Gordon Deal: If you’re using an old gas station credit card, you might be leaving money on the table. A new survey finds they just don’t offer the same benefits as other plastic. More from Matt Schulz, Senior Industry Analyst at CreditCards.com. He’s joining us today on the T-Mobile hotline. Matt, explain the findings.
Matt Schulz: The rewards that you get can’t really measure up to what other credit cards offer. And they’ve got an average interest rate of about 24%, which is really high.
Deal: Wow. Alright, so competition from other cards has not helped bring down that rate, for example, or offered a ramping up of perks?
Schulz: Right, exactly. What we found is that if you spend about $150 in gas each month you’ll end saving about $6, if you use one of these gas cards. Which $6 isn’t nothing, but it can’t compare with, for example, a $100 sign-up bonus that you would get with a general purpose credit card.
Deal: Wow, so what’s the problem with gas cards?
Schulz: Well, part of the problem is that gas stations only make about two or three cents worth of profit on each gallon gas so they can only afford to give discounts that are so big. In comparison to, say the Chase Freedom credit card, which gives 5% back on gas purchases this summer as long as you opt-in to their rotating categories that they have.
Deal: Alright so is the gasoline-focused credit card industry – well, sure they’re aware of it, but are they making any efforts to change here?
Schulz: Well, they are making some efforts to change. I mean, we’ve seen some of these cards offer sign-up bonuses, for example, where you can get twenty-five, thirty cents off a gallon. And those can be a good short term thing, say if you’re taking a long spring break road trip or a long summer road trip. But in the long run you’d be much better off going with another type of card that would offer you, say 3% back on gas purchases throughout the entire year and a sign-up bonus.
Deal: We’re speaking with Matt Schulz, Senior Industry Analyst at CreditCards.com. They’ve got some research that says that gas credit cards are stuck in the slow lane. So why would a consumer bother, I guess, with a gas credit card at this point?
Schulz: Well, they can be a good fit for you if you’re just getting started with credit or you’re trying to rebuild your credit because a lot of times these types of cards, ones that are called instant approval where you sign up and you know on the spot if you can get the card, those can be sometimes the only cards you can get if you’re somebody who’s just getting their feet back under them credit-wise. And in that case if you pay off your balance each month and don’t rollover balance so the high APR doesn’t matter, they can actually be a pretty good deal
Deal: Is there fine print with these that can trip you up, similar to other credit cards or is it different from other credit cards?
Schulz: Sure, there’s always fine print. With a lot of these, you have minimum spending thresholds where you, say would have to be 45 gallons worth of gas in order for these savings to kick in. And there are also maximum limits where you can’t make more than a certain amount of money within a given month. And then there’s also things where if you buy something at the convenience store attached to the gas station those purchases may or may not count towards your spending limits. So there’s lots of details, it’s always important to read the details before you get a card.
Deal: Thanks Matt, Matt Schulz from CreditCards.com.