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Gas rewards credit cards can take the edge off high gas prices

by Peter Andrew

Very recently, the British media marked a new record high in that country's gas (sorry, old chap: petrol) pump prices: $1.40 a liter. That translates into $8.40 a U.S. gallon for regular. Does that make you feel any better about paying roughly half that to refill your car? Probably not. The fact that, as a result of tensions in the Middle East, the whole world is suffering but that doesn't really reduce your pain.

Rewards credit cards "ease sting"

On March 23, The Palm Beach Post suggested something that might just take the edge off: using your rewards credit cards at the pump. However, this blogger adds a word of caution: only do so strategically. And it may take a little work to be sure that you're getting the best possible deal. Here are four things to look out for:

    • Don't assume that gas credit cards are better at the pump than general rewards credit cards -- check what's currently on offer on all your plastic.

    • If you have a choice, don't use rewards credit cards unless you can zero your balance at the end of the billing cycle. As with all purchases, if you're planning to roll forward balances over a long period, it's usually better to use low interest credit cards.

    • If you have one of those cards that offer bonus points or cash back on particular categories of purchase that change regularly, keep an eye on your credit card companies' websites. If gas is currently earning bonus rewards, that card may be a good pick.

    • If your gas station is offering a discount for cash, be prepared to calculate whether you're better off taking advantage of that or using your plastic. As a rule of thumb, if the discount's 5 percent or more, pay cash.

    Rewards and gas cards: shop around online

    On March 25, the Los Angeles Times' money advice column ran an article under the headline "Use a credit card comparison site to pick the right rewards card." Quite right -- and a testimony to your good sense in currently visiting one.

    Columnist Liz Weston responded to a question from a reader who was currently spending $6,000 a month on debit card purchases and automatic checking-account drafts. Would she be better off, the reader wanted to know, if she instead used rewards credit cards? Weston replied Yes -- by at least $720 a year, and more for those with great credit scores who are likely to qualify for the best deals.

    Weston describes cash back credit cards as "the simplest rewards cards".

    Apply now for rewards credit cards and gas cards, says Wall Street Journal

    Okay, that heading isn't a direct quote. But it seems to be the message of a Journal article that appeared on March 23. It began:

    Banks and credit-card companies are giving out record rewards to people who sign up for their cards as competition for well-heeled customers reaches a fevered pitch. For people with good credit and money to spend, now is a good time to take the leap, experts say.

    Yes, it's not just ultra-generous continuing rewards that credit card companies are currently using to lure new customers. They're also offering exceptional signup bonuses. If you're in the market for a new rewards credit card, take the L.A. Times' advice, and do some comparison shopping right here.

    Published 03/28/12 (Modified 01/08/14)

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