Fuel Rewards Programs - Their Pros And Cons
If you reside in an area where grocery stores offer discounts for fill-ups at their gas station based on your purchases at the store, you quite possibly feel like you're deluged with advertising about it.
They tout it as the best way to save money from your gas purchases and try to encourage you to spend as much as you possibly can at their store because, after all, you'll be saving cash at the gas pump.
But the question is - is it actually worth it?
Well, yes and no. It unquestionably can be if you're already making purchases at that store and are comfortable with the amount you are spending. The problem is if you see that you must spend $15 more to receive an extra ten cents off your fuel purchase, so you spend $15 on anything you see simply to get the gas discount. That's really pointless if you could have paid less for the purchase at a different store. Remember, an added ten cents off per gallon is just a $1.50 to $2.00 discount - certainly not worth wasting money you did not really want to spend!
Another major promotion these stores quite often run is related to gift cards. At times if you purchase a gift card at their store (generally offered for a variety of stores), they'll offer you double the fuel discount.
Let's think that through. Let's say you will earn 20 cents off for each gallon for every $50 gift card purchase you make. If your tank holds 16 gallons, that's a $3.20 discount. If you already need a gift card (perhaps for a gift), that looks like a good deal - you earn $3.20 for really doing nothing at all.
If you don't have a cash back credit card (like Discover More), you could maximize this special promotion by purchasing gift cards for all the stores you shop at. You'll get fuel rewards essentially for shopping at the stores you currently shop at.
Even so, if you do possess a cash back credit card, it will get a bit more complicated. When you use a gift card you won't be obtaining cash back rewards, so you will need to take that into consideration. If the cash back card offers you 5% cash back at grocery stores, buying a grocery store gift card is pointless. If you buy a $50 card, you will receive a $3.20 fuel reward as well as a $2.50 cash back reward on your gift card purchase (if you use your cash back card to buy the gift card), but you will miss out on the $2.50 reward you'd get for employing your cash back card on the subsequent $50 purchase.
On the other hand, if the gift card is in a category you only receive, say, 1% money back on, then your gift card purchase can be worth it. You'll receive the fuel reward plus a $2.50 cash back reward because you are purchasing the gift card at the grocery store. In the event you used your cash back charge card at the store only generating 1% cash back, you'd only obtain a reward of 50 cents. In this particular case, you essentially make $2. The question is whether the whole process is worth the $2 you gain.
As you can see, there are winning and losing situations with fuel rewards programs. You simply have to make the decision about when it's worth it and when it isn't.
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