AUSTIN, Texas, March 17, 2015 /PRNewswire/ -- For most consumers, gas station-branded credit cards are not a good deal, according to a new CreditCards.com report. What's wrong with gas cards?
- High interest rates: An average APR of 24%, far above the 15% for general-purpose cards.
- Minimal rewards: The typical gas card offers a 10-cent discount per gallon. That's a decent return (about 4% at current gas prices). But when gas prices rise, that percentage will decline. And it's already less rewarding than other options (see "Better Credit Card Picks" below).
- Paltry sign-up bonuses: Only a few gas cards offer sign-up bonuses, and those that do are not particularly generous. (A few extra cents off per gallon for the first 60 or 90 days is common.) That contrasts sharply with general-purpose credit cards that offer lucrative sign-up bonuses that can be worth hundreds of dollars.
- Extra hoops to jump through: Minimum spending thresholds, maximum limits, qualified purchases and tiered rewards levels are common among gas cards. They cut into the benefits and cause headaches for consumers.
For the full survey, go to:
"Gas cards are the dull, boring sedans of the credit card world," according to Matt Schulz, CreditCards.com's senior industry analyst. "They're stuck in the slow lane, destined never to be flashy."
Gas cards aren't all bad; they can make sense for building a credit history or as a short-term money-saving tool. Many offer instant approval and give new cardholders a quick burst of fuel discounts. But for most people, other options offer more value.
Better Credit Card Picks
- Chase Freedom: 5% back on gas purchases this summer (one of its rotating 5% quarterly categories). The card offers a $100 sign-up bonus and does not charge an annual fee.
- BankAmericard Cash Rewards: 3% back on gas purchases throughout the year and also comes with a $100 sign-up bonus and no annual fee.
- Capital One Venture Rewards: 2 miles per dollar spent anywhere, plus a 40,000-mile sign-up bonus (worth $400) and no annual fee for the first year.
CreditCards.com surveyed 20 credit cards tied to a specific gas brand that are available on a multistate basis. Local cards and generic cards that include a temporary or permanent reward for gas purchases were not included.
CreditCards.com, named a "Best Site for Managing Your Credit" by MSN Money, is a leading online credit card marketplace, bringing consumers and credit card issuers together. At its free website, consumers can compare hundreds of credit card offers from America's leading issuers and banks and apply securely, online. CreditCards.com is also a destination site for consumers wanting to learn more about credit cards. Offering advice, news, features, statistics and tools, CreditCards.com helps consumers make smart choices about credit cards. In 2014, over 22 million unique visitors used CreditCards.com to find the right credit card to suit their needs.
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