Gas Card Rewards Interview with KCBS Radio San Francisco

By Media Relations Senior Industry Analyst Matt Schulz spoke on Tuesday, March 17, 2015, with Rebecca Corral of KCBS Radio San Francisco about the results of the March 2015 Gas Cards Rewards survey. The interview and transcript are below.


Rebecca Corral: As you pull into the gas station for your next fill-up, you may see ads for gas branded credit cards that promise cash savings for every gallon. But before you apply for one, a new survey found that the cents off the gallon come with significantly higher interest rates. So does this trade represent a good deal for consumers? Senior Industry Analyst Matt Schulz joins us on the KCBS Central News line to try and answer that question. Thank so much for talking to us today. So let’s explore some of the difference between gas branded cards and other credit cards. What kind of difference are we looking at in terms of APR?

Matt Schulz: Sure, it’s a big difference. The average APR for a gas station credit card is about 24% whereas for an average general purpose credit card it’s about 15%. So that’s obviously a significant difference.

Corral: So if you’re paying it off, though, if you’re paying it off all the time then isn’t it a deal then?

Schulz: Well, it can be, depending on how you would use it, but by and large, the rewards that these gas cards offer up can’t really compare to what you can get from a general cash back credit card.

Corral: So in the report it said that ten cents a gallon savings is the most common for the gas branded cards and you add up the numbers of what a ten cents saving at the pump represents in the long term?

Schulz: Yeah, for somebody who would spend about $150 a month in gas then you’d end up looking at a $6 a month savings, which isn’t nothing, but it’s also not anything compared to what you can find with a $100 sign-up bonus that you could get with some of these other cards.

Corral: Is that what you mean by the cash back?

Schulz: Sure, yeah.

Corral: Or are we also talking about the cards where when you buy something you get a certain percentage in cash back?

Schulz: Yes, exactly. And that’s really what these cards are about. You don’t necessarily get the physical cash back, but you get the discounts off of the purchase price or you get a credit on your card statement.

Corral: So do a lot of people go in for these cards?

Schulz: They’re not as popular as they used to be if only because the card marketplace has gotten so competitive and so many other card issuers have gone after folks who used to be gas card holders. So it’s not quite what it used to be.

Corral: You know the thing that I’ve noticed is the places where you can get a gas credit card, let’s say Shell gas or Chevron, their gas is a lot more expensive than the place down the street.

Schulz: The reality is that gas stations only make two or three cents of profit off of each gallon of gas. So that kind of limits the amount of rewards that they can give compare to a standard credit card issuer which has much higher profit margins than these gas stations would.

Corral: And is that profit margin the same for the gas station charging $2.98 a gallon versus one that’s charging $3.45?

Schulz: Yeah, generally it’s about the same regardless of price.

Corral: Is this because the big stations have big advertising and marketing campaigns and such?

Schulz: There’s a lot that goes into it and the reality is they can’t afford to give something like 10% cash back or something like that just because of some of the realities of that.

Corral: Now are gas cards easier to get than regular credit cards?

Schulz: Yeah, they can be and much the same way that a Macy’s department store card you can get instantly at the counter, these cards are similar and because of that they can be a good option for someone who’s just getting started with credit or rebuilding credit when they’ve struggled and this card might be the only type that they can get.

Corral: Ok, so as long as it’s like, you’ve got a disciplined 20 year old that might be a good way to go.

Schulz: Exactly. And job one for somebody with this card or with any credit card is pay it off every month on time and you can make these things work for you.

Corral: Thanks for talking to us, I appreciate it. That’s Matt Schulz. He is an industry analyst with

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