Consumers hunt for price relief at the pump
Certain payment methods can save you pennies per gallon, but that can add up.
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Over the course of last year, the number of people holding credit cards with rewards for gas purchases grew from 6 percent to 10 percent, according to a survey of about 1,400 credit-card holders by Auriemma Consulting Group. Evidently, that's a sizable gain: "Relative to growth in other categories surveyed, that 4 percentage points … represents fairly strong growth for a category that is not brand new," says Scott Strumello, associate at the Westbury, N.Y., firm.Skip to next paragraph
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One website, LowCards.com, ranks its most preferred gas cards. In order, its top five are: Chase PerfectCard MasterCard; Blue Cash from American Express; Discover Open Road Card; Citi Dividend Platinum Select Card; Capital One No Hassle Points Rewards.
The Chase PerfectCard offers a 6 percent rebate on all gasoline purchases for the first three months after the card is issued, LowCards.com reports. After that, the rebate drops to 3 percent with a monthly $15 rebate cap. Card holders also earn a 1 percent rebate on all other card purchases. Gas cards are a "great way for consumers to save money," provided they fully pay off their card balance every month, says Bill Hardekopf, CEO of LowCards.com in Birmingham, Ala.
But consumers need to grasp a cards' terms and conditions. "Usually, these cards give a higher rebate percentage when you first sign up for them and over the first specified amount of months" – after which the rebate percentage may drop, Mr. Hardekopf notes. Moreover, some cards cap the rebate amount given during a given year.
Then there's the issue of getting the rebate. Rebates can come in the form of a check or a reduction in a card's balance. "But to get the rebate, most of the time you have to do something, such as calling and requesting it," Hardekopf explains.
Consumers who want more immediate rewards, but prefer not to pay in cash, can try other types of payment cards. Keith Reid, editor-in-chief of National Petroleum News, estimates that a "half-dozen more notable" organizations offer such programs. Among their features, proponents say, are payment methods with much lower costs for merchants than they have with other credit-card networks. Such savings can be passed on to customers.
Take the National Payment Card. Unveiled in January 2007, NPC allows consumers to turn their existing cards, even drivers' licenses (in 24 states) and loyalty cards, into private-label debit cards to pay for gas. Since the system has comparatively low transaction costs for merchants, participating retailers can pass on the savings. In fact, consumers using the NPC system can expect a price cut – the size determined by the merchant – right at the pump, officials say.
Users of Revolution Money's new RevolutionCard, a PIN-based credit card, can also expect savings at the pump. Indeed, at Tom's Stores in Pennsylvania, gas buyers using a RevolutionCard immediately get a 10-cent-a-gallon discount, notes Duncan Evans, senior vice president and general manager of retail business at the St. Petersburg, Fla.-based Revolution Money.
Launched in February, the RevolutionCard is accepted by more than 150,000 retailers, including 1,000 gas stations, it says.