Gas Discounts: Cash Versus Credit

Posted by Mrs Money on June 6th, 2011

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This past week I spent time up in Michigan with my family.  I drove there, and of course had to stop a few times to get gas.  There were a few things I noticed over the different places I observed gas prices.  For one, it was cheaper to buy gas when I left on Saturday, May 28 in the South versus anywhere else I saw.  While in Michigan over the week, I noticed the gas prices jumping to $4.19 a gallon! Ridiculous.  I thought gas prices were supposed to go down.

Another thing I hate about getting gas in Michigan is that there’s a different price for cash versus credit.  Where I live, this option does not exist, and I am so glad!  I use a gas rewards credit card to earn money back on each gas purchase, so when there’s a difference of ten cents a gallon less when you pay cash, it kills me!  I can’t help but think I could be getting the gas cheaper if I was strictly paying cash.  Of course, if I calculate it, my 4% back on gas purchases at $4.19 a gallon is a 16 cent rebate, so I’m still six cents ahead when I use my credit card.

I understand why merchants give a discount for paying cash (or stick it to the people who pay with credit cards!): credit card processing fees.  Merchants have to pay a credit card processor a certain percentage of each transaction that is charged at their store.  When customers pay cash, the merchant doesn’t have to pay any fees to anyone and the cash is immediately available to them to use.  Sometimes credit card processors wait days to make the funds available to the merchants, making it harder for them to operate their businesses.

While I do hate the fact that there’s a price difference for paying cash versus credit at the pump, I understand the reasoning behind it.  I also think there are many people who are far too lazy to get out of their cars to go pay for their gas.  Plus, if they’re anything like me, they hardly ever have cash on them!  I don’t carry more than $20-$40 on me at all times because if I have cash, I’ll spend it.  I wouldn’t have the $60 on me that it probably would take to fill up my tank.

Another tricky thing I noticed when I went to get gas at one gas station is that they switched the location of the cheapest gas.  I always get whatever grade is the cheapest, and it’s normally the very last one on the left.  When I went to get gas, I grabbed the last pump on the left and then looked at it.  It was actually the middle grade!  Had I not been paying attention, I would have gotten the more expensive gas!  That kind of irked me.

I hate when gas prices fluctuate like they have been.  I wish they would just stay around one price so we wouldn’t have to worry that we won’t be able to afford gas in the near future.

Have you noticed gas stations doing weird things like the cash versus credit discount? What angers you about the gas prices lately?

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2 Responses to “Gas Discounts: Cash Versus Credit”


  1. I just finished a trip from Georgia that extended up to Chicago and across Ohio before heading back down to the South. I observed gas prices ranging from $3.49 up to $4.51 depending on where we were during the trip. I noticed a good bit of the price difference between credit and cash purchases as well, but what stood out most to me was the money you can save on gas by timing each stop and avoiding gas stations around big cities.

    Fortunately, I was able to dodge the $4.51 a gallon price tag around the Chicago area by refueling a few hours south of the city. The same goes for larger cities like Louisville and Nashville that we passed through on our trip. Purchasing gas in small rural areas allowed our trip to be an affordable one!

    [Reply]

  2. krantcents says:

    What bothers me is not the fluctuation, but that it is almost daily. It goes up quicker than it will go down. Let’s not forget about you pay the higher price although it is the same gas in the station’s tank.

    [Reply]



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