Worried about gas prices? Don't do this
Four simple questions to ask yourself instead
Hi there, my friend.
AAA says that the average price of a gallon of regular gas, as I write this, is $3.98 nationally. That’s 14 cents higher than a week ago and a dollar higher than a month ago.
Sure, we’re still miles from the record high of $5.02 seen in the summer of 2022, but the huge spike in prices has definitely caught Americans’ attention.
I wrote a report for LendingTree this week saying that 31% of Americans have changed their typical spending or savings habits as a result of rising gas prices, and another 35% said they would do it if prices remain high. We also found that 51% of people with gas vehicles said they had filled up their tank before they needed to in order to get ahead of rising gas costs.
I applaud people for taking action. As I’ve said a million times here…
You have more power over your money than you realize. In challenging times, control what you can control.
That’s clearly what people are doing here, and that’s awesome. However, not all actions are created equal. In fact, there’s one step that may seem like a complete no-brainer when it comes to combatting high gas prices but can backfire in a big way if you’re not careful.
What not to do
I’m pretty sure you’ve seen them, those signs at the pump that advertise big savings per gallon if you sign up for the gas station’s branded credit card. Pretty tempting, right? Especially when gas prices are as high as they are today.
To be fair, these cards can be a great deal when used wisely. Just like with that credit card you’re offered at the checkout counter of your favorite retailers, the discounts are very real. However, also just like other retail credit cards, they have one massive problem that should never be overlooked: Their interest rates are often sky-high, even by typical credit card standards. (The average interest rate on a new store credit card in November was over 30%, while the average for all new credit cards today is about 24%.)
Because of that, my stance on these cards is clear…
No matter how big the discount or alluring the perks, you should never get a gas-station branded credit card if you expect to regularly carry a balance.
This isn’t just about gas-station cards. It applies to any retail credit card. I go into more here…
If you carry a balance, the math simply doesn’t work in your favor. When it comes to store credit cards, I’ve long said that you don’t need to be an accountant to know that paying 30% to save 15% on a purchase doesn’t make much sense. With gas-station cards, paying 30% to save 10 cents a gallon doesn’t make a whole lot of sense either.
There are plenty of credit cards out there that offer extra rewards on gas purchases but aren’t branded with a specific gas-station-chain’s logos. Those tend to come with lower APRs than gas-station-branded cards do and can be worth considering. However, if you carry a balance, any interest charges are still likely to outweigh any discounts or rewards you might receive.
So what should you do?
We’re all about asking the right questions here at Ask, Save, Earn, but sometimes the most important questions are the ones you ask yourself. That’s absolutely true when it comes to managing rising gas prices. Here are a few to consider…
“Will I pay my balance off every single month?” This is the key question we raised earlier. If your answer is an unequivocal, 1000%, no-doubt yes, then using a credit card to save on gas could be helpful. If it is anything other than that, it probably isn’t the best choice for you.
“Am I paying more for gas just out of habit or convenience?” We’re all creatures of habit. We tend to fill up our tank at the same place every time, much in the same way buy our groceries in the same place or take our dry cleaning to the same place. There’s comfort in the sameness. However, it can also come with a cost. If higher gas prices are putting a squeeze on you, consider using GasBuddy, Waze or other tools to seek out better deals near you. Doesn’t mean you need to drive across town to save 3 cents a gallon, but opening yourself up to more possibilities can be helpful.
“Could I just use my vehicle less?” For many of us, the answer is almost certainly yes. Carpooling, with family, friends or coworkers, can be a low-cost alternative. Public transportation could be useful as well, though, of course, it is a far better option in some places than others. Even riding a bike could be worth considering, if you live relatively close to work.
“Do I need to adjust my budget?” Unfortunately, for many Americans, the answer is likely yes. If you’ve got a lot of breathing room in your budget on a regular basis, maybe adjustments aren’t really necessary. However, if money is usually super-tight, it probably makes sense to review your budget to see where your shift your spending to allow for some extra spending on gas. Sure, it is possible that the conflict with Iran will end soon and that gas prices will plunge shortly thereafter. Still, when it comes to a budget, I’m always a fan of planning for the worst while hoping for the best.
Helping others pay less, earn more and keep more of their hard-earned money
The epilogue of “Ask Questions, Save Money, Make More: How To Take Control Of Your Financial Life,” is about paying it forward.
In it, I wrote the following…
It’s amazing to save more or earn more for yourself, but it can prove even more rewarding to help your loved ones do the same.
That’s 1000% true. I’ve taken my own advice to save money and earn more, but few things match knowing that I was able to help others. These posts are examples of that…
Now I want to help more and more people — and I need your help to do it.
If you don’t already subscribe for free, I’d love for you to take the leap. If you do, you’ll get my free guide, “3 scripts to lower your bills today.” It’s a perfect introduction to my mission here at Ask, Save, Earn — and the scripts really work.
Here’s a sneak preview of it, if you haven’t seen it already…
Just enter your email in the box below and you’re on your way.
However, I have one more request: I’d love it if you’d consider telling your loved ones about Ask, Save, Earn. It is as easy as clicking the button below and following the prompts.
If I get one single subscriber from your referral, I’ll be incredibly grateful. However, if you bring other sign-ups, there could be more tangible rewards heading your way. Check out the Leaderboard page for more details.
Thank you so much for considering this, and please let me know if you have any questions about all of it. I’m always happy to help.
Until next time!
Matt