Monday, 7 May 2012

Advantages of Gas Credit Cards

There are a number of reasons why a household would want to use a credit card that features a number of incentives and rewards that are themed around and about gas (as in gasoline stations for cars). The most obvious and the reason that must come up first in everybody's minds is the point system that these cards often feature.

We all know the point systems of these credit card products fairly well. We use a point system of sorts with our airline credit cards. Those credit cards accrue "miles" per every dollar spent. And we could spend those "miles" (points) at a sort of prize counter, in which we could cash in points for a number of prizes, i.e. tickets.

With gas cards, though, points are geared toward rewards about gas. Obviously, you won't be winning very many airline tickets with a gasoline themed credit card product. Instead, you'll be winning gas. Some cards actually borrow the mile system and use "gallons" instead. Gallons could be "cashed in" at the "prize counter" for things such as free car washes, free sort of trinkets for the car, even free actual gas.

These cards aren't just about the rewards though. For many households, it's a way of controlling an expense. A budget may be set, for example and a line in the budget for gas can be kept on a tight leash by saying, "Okay, you can only buy gas with this credit card and once that limit's reached, that's it. You're over budget." Households that are finding it hard to cost contain their gas consumption (which is usually the case about gas guzzlers such as SUVs) take it a step further, by making sure that the credit card product is actually a secured debt sort of arrangement.

See, with a secured debt arrangement, what happens is that the credit limit is more or less determined and dictated by the size of the cash collateral that's put up by the card holder or account admin. When you get into a secured debt arrangement with a card company, the company will only extend a line of credit for as much as there is cash on deposit to collateralize that debt. The important thing to keep in mind about secured debts is that the collateral that's sent over to them isn't made available to the card holder for use in some slush fund that's opened up for the borrower. No, this is kept aside from the line of credit entirely, as collateral only. Then the line of credit is extended to the borrower and it is indeed a loan, with dues that need to be paid on a regular basis, like any other card.

The secured debt arrangement is ideal for households trying to contain costs, because limits on spending can be controlled a bit easier.

Shawn has extensive experience in the world of credit cards. Follow him at his site Credit Card Offers to read more about the best card offers.

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