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Home News Tribune Online 08/22/05
By KATHY CHU
GANNETT NEWS SERVICE
Credit cards that offer up to 10 percent in gas rebates can take the edge off soaring prices at the pump — as long as you don't dig yourself deeper into debt.
Discover has a credit card that gives up to five percent cash back on gas purchases and up to one percent on other purchases. The Chase Perfect Card offers a six percent rebate on gas for the first 90 days the account is open and a three percent rebate after that.
You can find better rewards but to get them, you may have to stick to one brand of gas. Chase has a Hess Visa Platinum card and a Marathon Platinum MasterCard with up to 10 percent rebates.
As gas prices rise, issuers are getting more aggressive about marketing these cards. In late June, Shell and Citibank posted advertisements at gas stations urging consumers to "Earn 10c/gallon rebates," based on an average gas price of $2.05 a gallon. Discover plans to start running print ads for its gas and other reward cards in September.
Mailboxes are getting stuffed with these offers. Last year, 13.6 million pieces of direct mail about oil and gas cards were sent, compared with 6.6 million in 2003, according to Synovate, a market-research firm in Chicago. This year's volume is on track to exceed last year's level.
Should you get a gas credit card? It generally makes sense only if you plan to pay off the balance each month. Accruing debt and then paying interest to save a few dollars at the pump doesn't make much sense.
If you decide to get a gas card, shop around. Most have no annual fee, but rebates vary widely.
As with any credit card, the issuer has the right to change features and fees on short notice.
When you see the words "up to" used to describe a reward, it means that you may not get the maximum reward for all purchases. For example, the AAA Visa card, issued by MBNA, offers an up-to-five percent rebate on gas purchases but restricts how much you get back to two percent of total retail purchases. So, if you buy only gas on the card and you spend $100 a month, you'll get a $2 rebate.
Also be aware that some offers last for a limited time and apply only to certain regions. The Citi AAdvantage card is offering double miles on gasoline, supermarket and drugstore purchases. But the offer expires Oct. 31 and applies only to cardholders living in Miami and the New York tri-state area.
Oil prices rose more than $2 a barrel Friday, bouncing back from a dip earlier this week as markets reacted to a fire at a massive refining complex in Venezuela and developments in Ecuador, where protesters had forced a halt to production.
Meanwhile, markets remained wary over Iran's nuclear ambitions, with expectations that the situation could escalate, said Sandra Ebner, commodities analyst at Deka Bank in Frankfurt, Germany.
"I do expect to see new highs, and I would not be too surprised to see oil prices breach $70 a barrel soon," Ebner said.
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