Do Fuel Rewards Programs Actually Save You Money?
In the event you live in an area where grocery stores offer special discounts for fill-ups at their gas station based off your purchases at the store, you most likely feel like you are inundated with advertising about it.
They tout it as the very best way to save cash from your fuel purchases and try to entice you to spend just as much as you can at their store because, after all, you will be saving cash at the pump.
But the question is - is it really worth it?
Well, it depends. It definitely can be if you're already making purchases at that store and are happy with the amount you are spending. The problem is when you see that you have to pay out $15 more to get an extra ten cents off your fuel purchase, so you pay out $15 on anything you see just to get the fuel discount. That is pretty pointless if you could have paid much less for the purchase at another store. Remember, an extra ten cents off for each gallon is only a $1.50 to $2.00 discount - certainly not worth wasting cash you did not need to spend!
Another big promotion these kinds of stores usually run is related to gift cards. Often if you buy a gift card at their store (generally available for a variety of merchants), they're going to give you double the fuel discount.
Let's think this through. Let's say you'll earn 20 cents off per gallon for each $50 gift card purchase you make. Assuming your tank holds 16 gallons, that's a $3.20 discount. If you already need to have a gift card (perhaps for a gift), that seems like a good deal - you make $3.20 for actually doing nothing.
If you don't have a cash back charge card (like Discover More), you can maximize this promotion by buying gift cards for all of the stores you shop at. You'll get fuel rewards essentially for shopping in the stores you currently shop at.
However, if you do have a cash back charge card, it can get a bit more complicated. Whenever you use a gift card you will not be obtaining cash back rewards, so you have to take that into consideration. If your cash back credit card offers 5% cash back at grocery stores, buying a grocery store gift card is pointless. If you purchase a $50 card, you will get a $3.20 fuel reward along with a $2.50 cash back reward on the gift card purchase (assuming you use your cash back card to buy the gift card), however you will lose out on the $2.50 reward you'd get for using your cash back card on the following $50 purchase.
However, if the gift card is in a category you only get, say, 1% money back on, then the gift card purchase can be worthwhile. You are going to get the fuel reward plus a $2.50 cash back reward since you are buying the gift card at the grocery store. If you employed your cash back card at the store only producing 1% cash back, you would only obtain a reward of 50 cents. In this case, you basically earn $2. The question is if the whole process is worth the $2 you gain.
As you can see, there are actually winning and losing situations with fuel rewards programs. You just have to make the decision of when it really is worth it and when it's not.
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