Making Sense of Gas Credit Cards
One of the best ways to start saving money is to understand how to make money work for you. Unfortunately, if you are anything like me, you have had those times where you think that money grows on trees. Maybe it floats around in department stores or magically appears whenever you use your credit card.
Understanding how your gas credit card works can go a long way. You can save yourself from potentially damaging your credit and save yourself a lot of cold, hard cash. The easiest way to benefit from something is to understand the ins and outs of how it works. That way you know if it will work for you or if it won't.
Gas credit cards work like any ordinary credit cards. You swipe, the amount goes through the merchant and your credit card company clears the amount that you are paying for. It is an understanding between you and the credit card company. They will allow you to buy things now, without cash, so that you can pay them later. Sounds so simple doesn't it? Of course, if you do not pay, that is when fees, interest and finance charges roll in. The best way to benefit from your gas credit is really to pay off your balance every month. That way your savings do not go off to pay for future finance charges and interest.
One way to do this is to keep this card solely for gas purchases. That way the cash that you normally spend on gas can go to other important things like groceries. Checking when your due date is can also help you benefit more from gas credit cards. That way, if you know it is coming up than you can easily put aside the money that you need to pay off the balance. If you use the gas card with other gas-saving techniques like commuting, walking or carpooling then you are well on your way to saving lots of money!
The only difference between a gas card and a credit card is the cash back percentage that you get. It can go as low as 2% or even as high as 10%, depending on the provider. Now you have to check if this percentage applies to each individual purchase or for you bulk expense of the month. Why is this important? You have to know where the cash back applies so that you can get the best type of rebate for what you spend. Are there separate rebates for individual purchases or one giant cash back for your monthly balance? Most gas cards also offer 1% to 2% rebates on purchases other than gas. So you have to check and see which type of cash back you prefer.
Credit cards are not your enemy. There are simply there to make your life and purchases more convenient for you. Imagine paying a down payment on your new fridge with a wad of cash you carry in your pocket. If you use them wisely then you get maximum benefit for minimum hassle.