Maybe gas card companies think the general public is stupid. I received an "offer" from one of my gas card companies in the mail today. Such a deal!!! Until you read the fine print.
I have a BP credit card (was an Amoco when I opened the account in 1985) and the only real reason I keep it around is that it's one of my oldest accounts. Which always helps your credit score.
They sent me such an enticing deal that I just HAD to share. I'm not a math wizard, but I did want to show how they try to prey on people that use credit cards. Don't get caught in this BS trap.
It looks and sounds cool at first. Save 25 CENTS PER GALLON!! on a future purchase. That's 10% or more roughly per gallon. Wait, it's only for UP TO 20 gallons on a single purchase.
The way the "rewards" deal works is that when you use your card to purchase gas, they already allow you to save 10 cents/gallon anytime you use your card. So is this on top of the 10 cents or is it boost it to 25 cents? In other words, is it a 35 cents per gallon savings or only 15 cents per gallon net savings since you already would get 10 cents off per gallon with the card? Either way, with 20 gallons max, you can save anywhere from a whopping $3.00 or $7.00 in gas depending on if it's stackable.
And all you got to do to save 3 bucks or so on a fill-up you can't get until January? Spend $2,500 or more with your card from now to the end of the year!!
Now, if you're like many, you don't pay off your charge card every month. I do, and that's when I screw them on the reward side of things. My total interest charges on credit cards this year is $0.00, and I buy almost everything on the reward cards. I've probably spent over $25-30,000 this year on credit cards with rewards, and I always pay it off in full by the next month. And if you work it right, you can save even more. For example, being a veteran, I get a 10% discount at Lowe's, pay with another card that gets me 1.5% savings on general purchases, and pay that off every month. After that little pile builds up for a while, I can usually pay off the balance for a month with just the rebate $$ they put on my rewards balance. It's like getting free junk.
If you don't pay your card off by the payment due date the next month, they'll get that $3.00/$7.00 savings back in interest charges the very first month. In fact, if you bought the required $2,500 in goods to qualify for that "monster" gas savings, and only paid $50 per month, (assuming 18% interest and typical 2% minimum payments), it would take 94 months (7.8 years) to pay off with over $2,100 in INTEREST ALONE!!!!! i
I didn't get into the nitty gritty on every last penny here, but generally speaking, this is a TERRIBLE bonus for spending $2,500 on BP's particular card. Sure, if you bought $2,500 in groceries with it, you'd save 3%. So you'd save about 77 bucks on groceries. If you pay it off every month, any money you get back in rewards is a bonus. But they're banking on it that you won't. Literally banking on it.
What's worse, it's not even cash. It's a statement credit. So it's a tab at the company store sort of thing. I'm not trying to tell anyone how to manage their money. I'm just pointing out to when you get these crazy azz credit card offers, it's not all that great when you do the math. So, do the math!!
Here's the sorry details.
I have a BP credit card (was an Amoco when I opened the account in 1985) and the only real reason I keep it around is that it's one of my oldest accounts. Which always helps your credit score.
They sent me such an enticing deal that I just HAD to share. I'm not a math wizard, but I did want to show how they try to prey on people that use credit cards. Don't get caught in this BS trap.
It looks and sounds cool at first. Save 25 CENTS PER GALLON!! on a future purchase. That's 10% or more roughly per gallon. Wait, it's only for UP TO 20 gallons on a single purchase.
The way the "rewards" deal works is that when you use your card to purchase gas, they already allow you to save 10 cents/gallon anytime you use your card. So is this on top of the 10 cents or is it boost it to 25 cents? In other words, is it a 35 cents per gallon savings or only 15 cents per gallon net savings since you already would get 10 cents off per gallon with the card? Either way, with 20 gallons max, you can save anywhere from a whopping $3.00 or $7.00 in gas depending on if it's stackable.
And all you got to do to save 3 bucks or so on a fill-up you can't get until January? Spend $2,500 or more with your card from now to the end of the year!!
Now, if you're like many, you don't pay off your charge card every month. I do, and that's when I screw them on the reward side of things. My total interest charges on credit cards this year is $0.00, and I buy almost everything on the reward cards. I've probably spent over $25-30,000 this year on credit cards with rewards, and I always pay it off in full by the next month. And if you work it right, you can save even more. For example, being a veteran, I get a 10% discount at Lowe's, pay with another card that gets me 1.5% savings on general purchases, and pay that off every month. After that little pile builds up for a while, I can usually pay off the balance for a month with just the rebate $$ they put on my rewards balance. It's like getting free junk.
If you don't pay your card off by the payment due date the next month, they'll get that $3.00/$7.00 savings back in interest charges the very first month. In fact, if you bought the required $2,500 in goods to qualify for that "monster" gas savings, and only paid $50 per month, (assuming 18% interest and typical 2% minimum payments), it would take 94 months (7.8 years) to pay off with over $2,100 in INTEREST ALONE!!!!! i
I didn't get into the nitty gritty on every last penny here, but generally speaking, this is a TERRIBLE bonus for spending $2,500 on BP's particular card. Sure, if you bought $2,500 in groceries with it, you'd save 3%. So you'd save about 77 bucks on groceries. If you pay it off every month, any money you get back in rewards is a bonus. But they're banking on it that you won't. Literally banking on it.
What's worse, it's not even cash. It's a statement credit. So it's a tab at the company store sort of thing. I'm not trying to tell anyone how to manage their money. I'm just pointing out to when you get these crazy azz credit card offers, it's not all that great when you do the math. So, do the math!!
Here's the sorry details.
