Gas Cards Rewards Interview with KOMO Radio Seattle
CreditCards.com Senior Industry Analyst Matt Schulz spoke on Sunday, April 5, 2015, with Herb Weisbaum of KOMO NewsRadio Seattle about the results of the March 2015 Gas Cards Rewards survey. The interview and transcript are below.
Herb Weisbaum: Do you have a gasoline credit card in your wallet? Millions of people use them when they fill up, but a new study from CreditCards.com finds that the savings you’ll get from these gas cards is rather pedestrian. Matt Schulz is Senior Industry Analyst with CreditCards.com. He joins us on the KOMO Consumer Line right now with what they found.
Matt Schulz: Hi there, thanks for having me.
Weisbaum: So if you have one of these cards in your wallet and you have other rewards cards they may be best left in the wallet, huh?
Schulz: Yeah, exactly. We looked at about two dozen gas station credit cards and what we found is that they really can’t match what you can get from other general purpose cash-back cards.
Weisbaum: Give us some of the hard numbers, if you would.
Schulz: We saw that the average APR of these cards is about 24%, which is really high. It’s about 9% higher than the average for your regular general purpose credit card so that’s a big deal. And the reality is that the rewards that you get on these just can’t match what you can get from a general purpose card because you’re looking at about a 10-cent discount per gallon on average. And that averages out to about 4% return with today’s gas prices, but once those gas prices start marching higher, it’s going to be a lower and lower percentage and a worse and worse deal.
Weisbaum: And with gasoline rewards cards, are there some limits and some thresholds which can throttle back the rewards as well?
Schulz: Yeah, as with any credit card there’s some deals that you need to make sure that you know about. The biggest one with gas station cards is a minimum spending threshold. And a lot of them say that you have to buy 45 gallons worth of gas in order for discounts to kick in. So if you only buy 44 gallons of gas, you may not get any benefit at all.
Weisbaum: Well, that’s just, that’s ridiculous.
Schulz: It’s one of those details that you find in credit cards so it just points out how important it is to read your terms and conditions and make sure you know what you’re getting into.
Weisbaum: Yeah, now if people are interested in getting a new rewards credit card a lot of these now have incredible bonuses for signing up. You don’t get those kind of sign up bonuses when you get a gasoline card.
Schulz: No, absolutely not. You can get a decent deal where they might give you 25 or 30 cents off per gallon for 60 to 90 days so if you’re somebody who’s taking a long road trip with the kids or with your friends this summer, it can be a good short term discount, but by and large in the long run, you get a much better deal with some of these other general purpose cash-back cards.
Weisbaum: So Matt, is there ever a reason to get a gasoline card? I know they’re easier for a lot of people to get to start a credit history – would that be how to use them?
Schulz: Yeah, it really would because for a lot of people who might just be getting started with credit or who might be recovering from credit slip-ups, it might be the only card that they can get. So in that case it can be a good idea to get the card, keep it for a year, pay it off diligently, and then graduate to another card with better terms and conditions later on.
Weisbaum: Matt, for those who are listening and thinking about getting a new rewards credit card, you have some picks that you think are pretty good from CreditCards.com – could you run down those three for us?
Schulz: Yeah, sure. One of them is the Chase Freedom card, which gives you 5% cash-back on gas purchases this summer as one of their rotating quarterly categories. The trick with this is you have to opt-in to those categories or you’ll miss out on the benefit. But if you do opt-in then 5% cash-back during the summer, when a lot of people are doing a lot of driving, can be a really good deal. Plus it comes it comes with a $100 sign-up bonus and no annual fee.
Another one is the Bank Americard Cash Rewards card, which also comes with a $100 sign-up bonus and no annual fee. But the good thing about this one is it gives you 3% cash-back on gas purchases throughout the whole year. So that’s a good one for people who might not want to opt-in or might want to just not have to hassle with things like rotating categories.
Then the third one would be the Capital One Venture Rewards card, gives you two points per dollar spent anywhere plus a 40,000 point sign-up bonus, which is equivalent of getting about $400 back on your statement and that also comes with no annual fee for the first year so that can be a good deal as well.
Weisbaum: Great, well Matt, drive safely, spend safely, ok?
Schulz: You do the same!
Weisbaum: That’s Matt Schulz, he is Senior Industry Analyst with CreditCards.com and you can read more about gasoline rewards cards and some of their better picks for rewards cards in this week’s show notes. Just head to my website, ConsumerMan.com, and look for the blue radio show box on the top right-hand side of the page.