Updated on March 12, 2008.

THAT PAIN AT the pump you feel is about to get even more agonizing. Gas prices have increased 25 cents over the past month, lifting the average national price to an all-time high of $3.25 per gallon and economists are predicting that some areas will hit $4 a gallon by late spring.

Blame crude oil prices, which reached an all-time high of $108.21 midday Tuesday, says Tom Kloza, director of editorial content for the Oil Price Information Service, which tracks and analyzes petroleum prices. What's even more worrisome is that the peak was hit before the seasonal spring run-up in prices, when refineries close for maintenance and switch from the winter to the summer-blend gasoline, explains Troy Green, a spokesman for AAA.

That cutback in supply typically leads to the biggest price swings of the year. On March 4 of last year (when the spring run-up began) the national average price of gas was $2.48. By May 24, 2007, it jumped to an all-time record high of $3.23. "Even if we estimate conservatively, we're still reaching all-time highs [on a national level]," says Green.

With the exception of abandoning your car for your walking shoes, using a gas rewards credit card is one of the easiest ways to alleviate some of your pain at the pump. "Because gas rebate cards give you a percentage back, the higher gas prices go the more valuable these cards are in your wallet," says Curtis Arnold, founder of CardRatings.com. A 3% rebate is like knocking 10 cents off the average national price of $3.25 a gallon.

But as a growing number of savvy customers start taking advantage of the savings that gas rebate cards offer at the pump, credit-card companies are making it tougher for them to reap the cards' benefits. "Credit-card issuers have been trying to get people in the habit of using their cards for these everyday purchases," Arnold explains. "But such rewards are loss leaders. If everybody is using them, there's no way to profit." The end result? A cutback in incentives and plenty of fine print. Two years ago, most gas reward cards offered 5% rebates. Now, the average is 3%.

To keep your rebates from running out of gas, here are four things you need to watch out for before you apply for a gas rewards card:

Rebate caps

Many card issuers put caps on the amount you can spend each month or year, and still receive rewards. This isn't a recent fine print addition, but because drivers hit these caps more quickly as gas prices rise, it's worth comparing how much you typically spend on gas a month against these limits before selecting a card, says Scott Bilker, founder of

. The Discover Open Road Card, for example, offers a generous 5% rebate on gas purchases but that's only for the first $100 spent in each billing period. After that, you'll earn 0.25% to 1%, depending on your overall spending. Someone driving a Honda Accord in Los Angeles, where gas is averaging $3.57 a gallon, would hit the cap during their second fill-up in a given month.

Earning tiers

Even with $4 gas expected to arrive within the next few months, you may still not spend enough to get the full reward. Some cards assess rebates based on your total charges on the card, with bigger rewards only taking effect after you've done some big spending. Blue Cash from American Express offers 5% back on "everyday purchases" including gas, but only after you've charged $6,500 on the card in a given year. Prior to reaching that point, such purchases only earn 1%, while all others earn 0.5%.

Merchant restrictions

"People will drive a $60,000 SUV to get a $6 coffee, but will make a left-hand turn in traffic to spend a penny less a gallon on gas," says Kloza. The bargain-hunting mentality that has drivers seeking out the cheapest stations in

may mean the difference between paying $3.05 and $3.39 a gallon in Dallas, but it could also limit your credit-card rewards if you buy from a vendor your card issuer doesn't approve of. Gas-rebate cards typically restrict bonus rebates to purchases from stand-alone gas stations. Common exclusions include grocery stores (Safeway, Stop & Shop), convenience stores (WaWa, 7-Eleven), supercenters (Wal-Mart, Super Kmart) and wholesale clubs (BJ's, Costco, Sam's Club). Buy at a nonapproved vendor, and you'll get the lower, regular cash back rate instead of the gas purchase bonus. (Wholesale club devotees might try American Express' Costco TrueEarnings Card, which offers 3% on gas purchases at Costco and stand-alone gas stations.)

Station-specific cards are even more restrictive, with most offering paltry rebates for any gas station that isn't their own. A few are even stingier. The Chase BP Visa offers 5% on purchases at BP stations, but none at other gas stations.

Sky-high interest rates

"With gas prices the way they are, it can be very tempting to carry a balance," says Arnold. Big mistake. Gas rewards cards have some of the worst APRs of all reward cards, accounting for four of the top seven highest-rate cash-back cards, according to CardRatings.com. The priciest: the Citi CITGO card, at 17.99%. For comparison's sake, a standard rewards credit card bears an average rate of 13.42% fixed, 13.06% variable. "Carrying a balance will quickly eliminate any rebates you've earned," says Arnold. Don't apply for one of these cards unless you can pay off the balance in full each month.