When to Use Cash or Credit at the Gas Pump.

(Hint: Above $5/gallon, use credit with 2% rewards)

Many gas stations in California, Texas, Arizona and other states will charge two different prices depending on if payment is done by cash/debit or credit card. The cash/debit card price is lower than the credit card price, so it would seam obvious to pay with cash…but what if you have credit card rewards? That’s where this chart can come in handy.

NOTE: This assumes any credit card balance is paid off in full at the end of each month.

With the recent increase in gas prices, I realized my previous chart (see bottom of post) was out of date showing gas prices maxing out at $5/gallon. Here is the updated chart showing from the price ($5 to $10 per gallon of gasoline) on the left side. The difference in price between the cash and credit card price is the top row going left to right. The chart shows us that with a typical 10 cent difference between cash and credit prices, a 2% rewards on your credit card is needed to break even compared when paying cash.

Some regions in the United States don’t see different prices for cash or credit, but for those who do, this is a frequent tactic gas stations use to pass the credit card costs on to the consumers. Gas stations don’t make their money on selling gasoline, instead they make most their profit from the concessions in the store (candy, soda, water, etc.) Even the President apparently knows this…

Additional Credit Card Tips

Here are some additional tips to consider for saving money at the gas pump

• Check to add a “ booster “ one time (or quarterly like with the chase freedom credit card) reward for a specific credit card.
• Applying and using a credit card at a frequently used gas station to get those higher rewards.
• Use a high rewards grocery store/target/ credit card to buy gas station gift cards.
  • The American Express Card has 6% rewards at grocery stores among others.
• Check to make sure you don’t max out of your rewards on each card for each 12 months of usage.

Vehicle Performance Tips

Here are some additional tips on keeping your car running at maximum efficiently

• Fill up your tires to the proper air pressure. Check the sidewall for the recommended amount.
  • Use that free air and water at the gas station
• Check your oil and make sure it’s clean and the appropriate amount
• Keep your fuel efficiently high by driving economically with slow accelerations and cruise control on highway driving

Savings Beyond the Pump

Looking for other ways to save money related to getting around to avoid using gasoline, here are some of my top ideas:

• Consider walking, biking, scootering short trips and leave the car parked
• Carpool, public transit (bus, train), or e-bike your regular commute
• Consider an electric car as an alternative to your current ICE car
• Telecommute or make a zoom call if possible

Concluding Thoughts

Gas prices appear to be like a ratcheting tie down strap. They easily go up, but don’t let you go back down. We’ll see where things ends up, but if prices do come down, here is the original chart showing that: