Gas Cards Rewards Interview with KFNN Radio Phoenix
CreditCards.com Senior Industry Analyst Matt Schulz spoke on Monday, March 30, 2015, with Ken Morgan of KFNN Radio Phoenix about the results of the March 2015 Gas Cards Rewards survey. The interview and transcript are below.
Ken Morgan: Joining us this morning is Matt Schulz. Matt is CreditCards.com Senior Industry Analyst. Good morning, Matt.
Matt Schulz: Good morning.
Morgan: Thanks so much for joining us. My father was from a different era. He didn’t believe in credit cards at all. He said if you don’t have enough money to buy something, don’t buy it. The only credit card he ever had in his entire life was a Shell credit card that he used because he drove quite a bit in his job. I’m surprised they’re still around, credit cards from gas stations and gas companies.
Schulz: Yeah, they used to be a lot more common than they are, but we just did a survey that looked at about two dozen of them and we found that there’s probably a reason why they’re not as common anymore because they have interest rates that are about 24% on average and rewards that just can’t really match up to what other cards can offer you.
Morgan: Why were they so popular at one time?
Schulz: Well, I think that the whole credit card market place just used to be different and a little less competitive. There were a few less players in it, but once the big banks kind of saw the opportunity to go after those gas station card customers, they really went after them with a vengeance with things like cash back and that sort of thing. So it really hurt that business.
Morgan: I guess if you are somebody who is still like my dad, it would make sense, but you can use just about any card at any gas station.
Schulz: Yeah, exactly. And you will find that a typical gas station gas card will give you about ten cents off per gallon. With these low gas costs these days that’s about 4% off. But nowadays you can also get, with like a Chase Freedom card, you can get 5% back on gas purchases during the summer plus get a $100 sign-up bonus and no annual fee. So that kind of trumps what a gas station can give you.
Morgan: Plus many of those other credit cards offer other additional rewards too: points and things like that. Do the gas cards offer anything other then a discount per gallon on gasoline?
Schulz: Well, that’s really the big push. They do offer some sign-up bonuses. So for example, instead of the ten cents off per gallon you might get twenty-five or thirty cents off per gallon for the first 60 or 90 days. And if you’re taking a big road trip this summer, that could really help. But in the long run a basic cash back card will be a better deal.
Morgan: Any other things that we have to deal with when getting a gas credit card?
Schulz: Well, a lot of just kind of the general things that apply with any credit card where the first thing you have to do is pay off your balance every month, especially with a high interest rate like these cards have. And if you don’t do that, then the math works against you pretty quickly.
Morgan: Alright, is there a reason to have one? I guess would be the next question. I’m trying to find a reason and I haven’t come up with one based on anything I’ve thought or you’ve said so far.
Schulz: Sure. Well, they can be good as a short term discount if you get one of those sign-up bonuses and you’re going on a long road trip. They can also be good for people who are trying to rebuild their credit or get started with their credit because it can be pretty easy to get these cards and it can be a way for somebody to show that they can handle credit better if they’ve screwed up in the past.
Morgan: And you can only buy gasoline with it.
Schulz: A lot of times. Some of these can be co-branded which means that you can use them anywhere, but yes – a lot of these cards can only be used at these gas stations.
Morgan: So you’re advice would be if you don’t need to build credit or those specific things, just not get one at all?
Schulz: Yeah, generally it’s such a competitive marketplace out there, you can find better deals than these cards generally, if you have pretty good credit.
Morgan: Alright, excellent. Well, we appreciate your joining us this morning. CreditCards.com is the website. Matt Schulz – Senior Analyst, thanks so much for joining us.
Schulz: Thank you.