It has been proven by many motorists and financial analysts that the best way to beat the soaring gas prices is to use gas cards. But for those motorists who have not tried using gas cards, the common question is on how much savings is there on gas cards. There is no definite answer to this and the answer depends on a case to case basis-on the gas spending habit of the motorist. To answer this question however, one must first know how gas credit cards work.



The savings from gas credit cards come from the rebate offered by the card. For every purchase of gas, the card company offers rebates to an average of 5%. If the card is new, different rates may apply. To attract more customers, some card companies usually offer a 10% rebate on the first few two to six months. Rebates are usually in the form of cash back debited to the existing card or on other forms of rewards such as airline tickets or gift certificates.

So for instance if your average daily gas consumption is at $40, during the first few months, you will benefit from a rebate of $4 a day or an average of $120 per month. On regular months though, after the introductory period, the rebate will only be $2 a day and $60 per month. This makes the average yearly savings on the card at $720, using the regular rate. This is definitely a sturdy savings on gas money.

There is a downside however, in using gas credit cards. You must be able to pay the total amount of the bill before or during the due date or you will be charged an annual percentage fee. The average annual percentage fee is at 14% and given the above gas spending habit, you will be charged an annual percentage fee of $2,016. This is a much higher interest compared to the savings, thus your savings is negated by this fee and you have to cash out an additional of $1,296. So to maximize savings from gas credit cards, the total bill must be paid in full or you end up paying for more than your usual spending amount.

So, before applying for a card check out the rebate rate. The current highest offer during regular months is 5%. A card offering a rate lower than 5%, will not offer you the maximum savings available on gas cards, unless the card compensates on other forms of rewards. The next thing to check is the form of rebate the card offers; always go for cash back rebate. You can use this rebate to purchase gas and earn rebates on it. And lastly, consider the annual percentage rate. Even if you plan to pay your bills in full, there may be unavoidable instances when you won't be able to. And if you do plan to maintain a balance on your card, do the math and compute the maintaining balance that would still allow you to earn savings.