Gas Rewards Cards Making It Tougher to Reap Benefits

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: