With the national average gas price topping $5 a gallon in June of 2022, consumers are feeling the pinch at the pump. One way to save money on gas is by using gas rewards cards. Since roughly two-thirds of consumers pay for gas with plastic, according to the National Association of Convenience Stores, it makes sense for many consumers to earn rewards in the process.

Gas credit cards are available as private label cards for specific gas brands or as co-branded cards, which are issued by banks and carry the logo of a payment network such as MasterCard or Visa. There are also gas charge cards that aren’t part of a larger payment network and can only be used for purchases from the gasoline retailer. In addition, there are credit cards that offer bonus rewards for gasoline purchases, even though they aren’t co-branded with a gas retailer.

Rebate amounts for gas purchases vary, but many cards fall in the 1 percent to 3 percent range, according to the experts paneled for this article. A few cards offer 5 percent off or more.

But just having a gasoline card doesn’t mean that you’re saving as much money as possible on gas. Here are seven tips for using your gas credit cards wisely.

Don’t carry a balance

“As long as you’re paying off your balance in full every month, a good rewards gas card is found money,” says Joe Ridout, spokesman for consumer advocacy group Consumer Action in San Francisco.

However, Ridout cautions, gas rewards cards are not appropriate for consumers who carry a balance, because these cards tend to have higher annual percentage rates than regular credit cards.

Here are Bankrate’s picks for best credit cards for gas rewards. Before you choose one, be sure to compare the APRs, especially if you plan to carry a balance.

Paying interest can offset any discount from a gas card. A typical gas credit card can have interest rates between 20 percent and 30 percent APR. When you carry a balance, the interest charges that you pay can easily exceed the value of the cash back or other rewards that you earn. Therefore, you should only use a gas card when you can avoid interest by paying your statement balance in full, every month.

Don’t pass up cheap gas to use your gas card

Before signing up for a gas rewards card, look at your gas-buying habits. Where and how often do you fill up your gas tank? Do you burn gas on road trips when you travel? Do you need a gas rewards card or could you simply switch to a gas station with lower prices?

Unfortunately, too many drivers pass by the lowest price gas and visit the stations where they have a gas card — and often end up with minimal savings, or even paying more.

In addition, consider the differences between private label cards, also called retail cards, and co-branded cards. When you have a card that gives you additional points, miles or cash back for gas purchases, then you can shop around for the best gas price and still earn rewards. Just keep in mind that gas bought at warehouse fuel centers like Costco and Sam’s Club won’t be eligible for most card’s bonuses.

Don’t drive out of your way to earn rewards

The savings offered by gas credit cards is small, but significant. However, even if you have to drive a few extra miles to fill up, the gas you waste can largely offset your savings. You also have to consider the value of your time as well as other costs associated with maintaining your card. To best use a gas card associated with a specific retailer, you should make sure that there are stations that aren’t out of your way.

Consider how and when you’ll collect rewards

Some rewards programs cap your rebate amount or set a minimum threshold for cashing out, so consider those details before signing up. Some gas cards offer rewards in the form of a discount on a single fill-up. This can deliver much more value to a car with a large gas tank than a smaller one.

Others offer reward points that don’t have a clearly specified value. Be sure to understand how valuable the points are before committing to a specific card.

Check the rewards cards you already have

If you’re not a heavy gas user, then you might be better off with a general rewards credit card that allows you to earn points for purchases in other categories as well. In fact, some of these rewards programs are pumping up incentives by offering accelerated rewards in rotating quarterly categories including gas. Cards with rotating bonus categories include Chase Freedom and the Discover it® Cash Back.

Understand the card’s terms

Private-label gas cards especially can have less competitive rates and terms, on par with subprime cards offered to those with credit problems. That means consumers should watch out for high APRs, late payment fees, overlimit fees and enticing introductory offers designed to lure consumers in need of credit.

If you’d wipe out the rebate savings from a gas rewards card by paying a high APR or fees. If you think you might carry a balance or incur late fees, you should be looking for a general purpose card that offers the best possible terms.

Don’t overestimate gas savings

It can be easy to get excited about earning 3 percent cash back on gas, but you really have to consider how much savings that really is. According to the U.S. Department of Energy, the average fuel economy for a passenger car is about 24 miles per gallon. And the average driver traveled 12,724 miles in 2020, according to the U.S. Department of Transportation Federal Highway Administration.

Someone driving 13,000 miles, in a car that gets 24 miles to the gallon, will consume about 542 gallons per year. Based on the current average price of a gallon of gasoline, which is $3.78, this will cost about $2,048 per year.

Using a card that offers 3 percent cash back on gas will result in about $61 in annual savings. That might not be enough to cause you to switch credit cards.

The bottom line

Credit cards can be a great way to save money on gas, but only when used wisely. By taking care to choose the right gas card and being realistic about your potential savings, you can minimize the cost of fueling your car.