Even if you have never used gas cards before, you have likely seen those colorful ads while you are at the pump. They may seem too good to be true – free miles and travel benefits for simply paying at the pump with a card? What possible profit motive could be driving this? Gas is a necessity that everyone needs. On top of that, Petroleum companies are some of the most profitable in the world. Why give any sort of a discount on anything?It may be necessary to better understand the market before delving into how you can profit from it.
Gas Cards and Credit
The best part about gas cards is that you can gain the extra benefit of travel miles without losing out on the benefits of a normal credit card. Gas credit cards report to the major credit bureaus, so gas credit cards can help you build your normal credit. Because the gas card is considered a retail card, it usually requires a lower credit score than traditional cards. Some gas cards are available for people with “poor” credit, which is generally defined as a FICO credit score that is below 650.
Of course, the added benefit of gaining travel miles is the number one reason that people gravitate to gas cards. If you want to maximize all of the benefits, however, you can follow these steps.
- Apply for your cards at one time – Every time you apply for a credit card, the card issuer will need to check your credit.
- Check the terms – Does the gas card have an annual fee and an interest rate that you can deal with?
- Choose a gas card with a convenient location – It is no good having a gas card with great terms if the station for the card is far away from your home and work.
- Pay the balance in full – In order to avoid paying the interest rate on your card, pay your balance off in full each month.
- Watch your credit utilization – In order to maximize your credit score, you do not want to spend more than 30 percent of your available credit at any one time.
Getting Free Miles at the Pump
Gas cards work on percentages, which may be counted in points. These points can be redeemed at various travel companies, where they are converted into miles. Depending on the program that the company runs, points may be worth more or less miles.Here we take a look at some of the programs that you can use to get free miles at the pump as well as many other benefits.The Bank of America Cash Rewards Credit CardAside from being backed by one of the biggest banks in the United States, this card gives you a choice of 3 percent back in a category of your choice. One of those categories is travel, and your purchases are eligible on a maximum of $2500 in combined choice category. You also get an introductory cash reward bonus of $150 if you spend $500 on the card within the first 3 months of getting your account.
The Citi Rewards+ Card
If you are a big spender on travel, then the Citi Rewards+ Card may be the choice for you. The first three months is your time to really come out ahead. If you spend $1,000 in the first 90 days, you get 15,000 bonus points that can be redeemed for miles.
The Wells Fargo Propel American Express Card
Users of the Propel American Express Card from Wells Fargo get a huge three points per dollar on travel and other categories. If you spend at least $3000 in the first 90 days of opening your account, you get an enormous 30,000 point bonus as a sign up. Best of all, you do not have to pay any annual fee. You also get an intro APR of 0 percent for the first 12 months on all purchases and the first 120 days on balance transfers.
Dana George-Berberich is a freelance reporter and novelist. She has written finance articles for newspapers across the country and for companies like Dun & Bradstreet and Bankrate.
