Read The Fine Print Of Credit Card Advertising And Crunch The Numbers

by Hank

Beware of credit card advertising at the gas pumpI am a creature of habit. I always use the same gas station on my way home from work. While I will not name the company out of fairness, I wanted to share with you how their credit card advertising is not all that it is cracked up to be when you read the fine print and crunch the numbers.

The Credit Card Advertising Deal Offered

Like most national gas stations, the one that I use has its own gas credit card that works much in the same way as a department store credit card which is run independently of the four major credit card companies: Visa, American Express, MasterCard, and Discover. If you apply for and use the gas station’s credit card, you will qualify for a five cent reduction in the price of gas.

The Fine Print Of Credit Card Advertising

Gas is expensive, and it has been getting worse over the past month or two. While a five cent discount seems like a good deal on the surface, there are stipulations. You have to purchase at least 45 gallons of gas per month, and you can only have the five cent savings apply to a cap of the first 100 gallons that you buy each month.

Crunching The Numbers Of Credit Card Adverting

So, for example, if the price of regular unleaded is $2.99 per gallon and you have a 15 gallon gas tank in your car, you can save 75 cents every time you fill up. That equates to a whopping discount of 1.67% of the sticker price of your gasoline. That will of course save you $5 per month and up to $60 per year if you bought 100 gallons of gas using that credit card each month. Most people would be excited about saving $60 on the cost of gas per year. And, they should be. After all, every little bit of savings helps in this economy. The real problem will hit a consumer if they do not pay off their gas credit card at the end of each month. The credit card that specifically offers this deal has an annual percentage rate of 24.99% which like department store credit cards is considerably higher than even a regular Visa, MasterCard, or American Express.

I only bring this example of credit card advertising to people’s attention because these deals are everywhere. Every store seems to have its own credit card, and every card has its own reward system or money back program to entice consumers to apply for more credit and spend money. But, consumers need to be aware of the fine print of credit card advertising. In many instances, these deals that look great on the surface are far from good deals as you dig deeper and crunch the numbers.

(photo credit: Shutterstock)

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