Gas prices are rising at unprecedented rates, and so is the need for creative solutions to help combat the additional costs.
One way, among many, is the use of cashback rewards on credit cards to help offset the cost of gas. If you have a gas card that offers the reward and aren’t sure how to use it, or if you’re shopping around for a credit card with cashback rewards, here is everything you need to know.
To earn cashback at the gas pump with a credit card, all you will need to do is charge the amount of the gas to your credit card. Your rewards usually won’t be instantaneous and instead will come after one statement period, which is typically every month.
Branded gas cards can be a great way to specifically tackle gas station rewards. If you drive often or gas is one of your biggest purchases, a branded gas card may provide the most benefits and “bang for your buck.” Benefits of branded cards typically include a low or sometimes no annual fee and can be applicable to a gas station that you prefer, amounting to higher cashback rates.
If gas is only one of your major expenses in addition to costs such as groceries, then a general cashback card option may be better. This way, the benefits are universal and can benefit all purchasing areas rather than only gas or one brand of gas if you tend to purchase from different stations without a preference.
If you’re hoping for a big payout that covers the entire amount of your gas in rewards, that is unlikely even with the best rewards programs. However, that doesn’t mean that there isn’t a significant portion that you can earn back to make it worthwhile.
The actual amount will depend on the amount of gas and the percentage of cashback your financial institution offers to customers. To figure out how much your cashback can be, you might consider checking out your credit card’s online calculator if applicable or simply do the math yourself:
Amount ($) x Cash Back Rate (%) = Rewards
For example, if your gas costs $50 and the cashback rate you receive is 5%, then you would receive $2.50 in cashback. Over the course of a month, that may be $5 or more, which could earn enough for a free tank of gas at the end of the year in cashback alone. While that may not seem like a lot when broken down, it is still money that you would not be otherwise earning, and the rewards can add up quickly!
Depending on how your financial institution operates, you may be able to receive the cashback rewards in a check, direct deposit, cash card, or credited to your credit card balance. You will need to check with your card issuer and select your preferred method to claim your cash back.