Just not worth it: The worst gas cards

A credit card that lets you earn cash or points can help cut the cost of your fill-ups. But if you want to get the best payback, you need to shop around and compare offers. Two new reports show the rewards cards offered by the big oil companies are not the way to go.?

?Don?t think you?re saving a lot by having one of those gas company credit cards,? says Odysseas Papadimitriou, CEO of comparison website CardHub.com. ?For most people, you?ll literally get almost nothing in return for giving up your flexibility.??

For example, with the Conoco card you need to buy at least 45 gallons of gas in a month to get the meager savings of 5 cents a gallon. And rewards stop after 110 gallons in any qualifying month.?

The Citgo card limits rewards to the first 90 days after opening a new account. The payback is capped at $50. After the first three months, there is no reward.?

A survey by another comparison site, NerdWallet.com, came to the same conclusion: You?d be better off with a general purpose rewards card.?

Anisha Sekar, vice president of credit and debit products at NerdWallet, analyzed cards from five major brands: BP, Chevron, ExxonMobil, Gulf and Shell. She found that these branded cards offer few rewards and have many gimmicks.?

?There is so much fine print,? Sekar says. ?You?ll find limits on how much you can earn a month and limits on how you can redeem what you?ve earned.??

Card Hub analyzed the major gas reward credit cards and picked these as the worst:?

• Chevron and Texaco Gas Card: This card only saves you 10 cents per gallon, but at current prices that's only 2.7 percent. (You can get 3 to 5 percent on most good rewards cards.) Savings are capped at $300 per year. You stop earning rewards after the first 60 days.?
• Shell Platinum MasterCard: Savings with this card are variable. If you spend less than $500 per month, you get absolutely nothing. Spend $500 to $999.99 in one month and you save 10 cents a gallon off the Shell gasoline you buy the next month.?

Do oil company gas cards make sense for anyone? Card Hub?s Papadimitriou says these cards are for people with damaged or limited credit who want to be able to pull up for a fill-up and not have to pay in cash. For everyone else, he says, a generic rewards credit card that can be used at any station makes more sense.?

What are the best reward gas credit cards right now??
I contacted four websites that specialize in credit card comparisons -- CardHub.com, LowCards.com, Credit.com and NerdWallet.com -- and asked for their top picks for gas cards. Three cards got the most recommendations.

• Chase Freedom Visa: It pays 5 percent cash back on up to $1,500 of gasoline purchases in the first and third quarters. The rest of the year the gas reward drops to 1 percent. This card offers a $200 cash bonus if you spend $500 in the first three months. No annual fee.
• American Express Blue Cash Everyday Card: You get 2 percent back on gasoline, 3 percent on grocery and department store purchases and 1 percent on everything else. Spend $1,000 in the first three months of receiving the card and you get a $100 cash back bonus. No annual fee.
• Pentagon Federal Credit Union Platinum Rewards Credit Card: With this PenFed Visa card you earn points that you convert to cash (in the form of a Visa prepaid card), merchandise or travel. The points work out to 5 percent for gas, 3 percent for groceries and 1 percent for everything else. And there?s a bonus: You get 5,000 points after your first purchase and 20,000 points if you spend $1,000 in the first three months of having the card. There is no annual fee. You don't need to be in the military or work for the government. Anyone who joins the National Military Family Association ($15 one-time fee) or Voices for America's Troops ($20 one-time fee) can get the card.

A few cautions
Before you apply for any credit card, take the time to read all the terms and conditions. Be sure you know how the cash-back offer works and look for any restrictions. These pitfalls include:

• Spending categories that rotate each quarter. That 5 percent reward on gasoline purchases could be limited to certain times of the year. And you may have to go online to sign up for that higher reward every quarter.
• Spending tiers that must be reached in order to qualify for the maximum cash-back reward.
• Limits on how much you can earn in a quarter or a year.

Rewards credit cards have some of the highest interest rates. So they are only for people who pay off their bill on time each and every month. If you miss even one month, you?ll lose money.?

"The interest charges are going to outweigh whatever you would have earned on the reward,? notes Greg McBride, senior financial analyst at Bankrate.com. ?Instead focus on cards that have the lowest possible interest rate.?

You can compare these cards at sites such as: CardHub.com, LowCards.com, Credit.com, NerdWallet.com and Bankrate.com.

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Source: http://bottomline.msnbc.msn.com/_news/2012/03/21/10777416-worst-deals-on-gas-cards-and-a-few-good-ones

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