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With gas prices continually rising, everyone is looking for ways to ease the pain at the pump.
Credit card companies have been offering gas rebates as an incentive to use their cards. But that alternative may not pay off for everyone.
Pay with plastic to ease the pain at the pump! At least that's what credit card companies want consumers to believe by offering gas rebates as an incentive. Citicard's version grabbed praise from Smart Money Magazine.
Anthony Jenkins, Citicard: "Obviously with gas prices rising, everybody's interested in that category."
Kevin Tate's interested. He spends the equivalent of a car payment to gas up every month.
Kevin Tate, Motorist: "I guess it's something will look at if its an option, we'll definitely do it."
But before you get all pumped up, credit expert Kelly Rote encourages consumers to look beyond the amount of the rebate.
Kelly Rote, Credit Expert: "They need to be sure to pay those balances in full each month, otherwise, they might be saving, say 5% in a rebate to pay 12% in interest."
Victoria Lim, NBC News: "Also, watch out for changing terms of the credit card. When AAA first introduced its gas card last year, users received a 5% rebate on gas purchased at the pump. But those stipulations changed this past winter."
Gregg Laskosk, AAA: "The card's administrator, MBNA, decided they wanted to make sure people weren't using the card exclusively for the gasoline purchases because I think they felt they would be losing money on that."
Now, to get the full benefit, you must spend 150-percent more on non-gas items. Meaning if you spend 100 bucks on gas, you must spend 150 bucks on something else to get the full five percent gas rebate.
The same stores where you buy paper towels in bulk also offer continuous savings on gas. It costs about 30-to-45 dollars for the typical consumer to sign up, and you can save several cents on every gallon. That pays for the membership, and then some before the year is out.
Here's what to look for if you're signing up for a gas rebate card:
- Where can you use it?
- Do you have to stick with one brand of gas, or can you use it anywhere?
- How much do I have to buy get full benefit of the rebate?
- Is there an annual fee?
- What is the interest rate?
- If don't pay off balance, does interest rate exceed the rebate amount?
How much do you have to buy to get the full benefit of the rebate? Some cards give you the full benefit on gas only, others, require you to spend money on other items to get the full five percent. Is there an annual fee? What is the interest rate? If you can't pay off the balance in full, and the interest rate exceeds the rebate amount, you won't receive the benefit from the card.
Don't forget to ask if there's a cap on how much money you can earn back.