Fuel credit cards are advertised everywhere these days.
Like most things, fuel credit cards probably can be a great idea and an excellent way to save some money. The one thing that nearly everyone uses is petrol, so getting some money off on those frequent and costly purchases cannot be bad. However, before you jump at the chance to get one of these cards, you should consider whether or not they are right for you. Indeed, there is potential that another card might be better suited to your unique spending habits.
Pros And Cons Of A Fuel Credit Card
Pros – This type of credit card is typically associated for a specific brand of petrol. Citibank offers what is called the Citibank BP card that offers consumers 5% off fuel purchases that are made at any BP station and another .5% back on all other purchases. In this way, it works like rewards plastic giving you something back for all of your purchases. If you drive a lot and therefore spend a lot on petrol then you stand to save quite a bit of money. Just make sure that the places you drive have BP stations that are convenient for you to use in order to maximise your savings.
Cons – Probably the biggest drawback is how this plastic stacks up against other rewards offers. Even though you might be able to get a significant chunk of change back on petrol purchases, you could profit more if you had a card that gave you cash back at a solid rate on all your purchases. Using that Citibank BP example, consider that if you spend $1000 per month on your card and $100 of that was for petrol, you would get $9.50 back. However, if you used a rewards program that offered just 1% back on all your purchases, you would get $10 in cash back. Of course, the figures will have to be adjusted for your spending, so do the math and compare your actual costs to see which one would better suit you.
Another thing to look out for are the use restrictions on fuel cards. Some issuers might restrict the amount on which you can collect the discount each month. Usually this spending ceiling is quite high so the average cardholder will not have to worry about it. However, if you travel a great deal and therefore spend a lot of money on petrol then you must look for one which has no limits or possibly opt for a straight up rewards card instead.
Overall petrol credit cards are a good idea. This is especially true if your monthly budget includes a large sum for petrol purchases. By choosing the right plastic, you can cut back on those costs so that you have more money left in your wallet after you fill up the tank. Just be sure to choose wisely as not all of these cards are the same and no card is perfect for every consumer.