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How to use your credit card to save money on gas

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Bankrate Senior Industry Analyst Ted Rossman sits down with Yahoo Finance Live to examine strategies to save money against rising gas prices, including using grocery reward cards, consumer trends in vacation planning amid inflation, and how to cut down on gas consumption while driving.

Video Transcript

- Well, speaking of gas prices, it's hard to miss when you see these giant numbers that are three-foot high with these booming prices looking at around $5 a gallon. So how about some tips to help us save some money on gas? For that, let's bring in our next guest, Ted Rossman, Bankrate's Senior Industry Analyst. So, Ted, help us out. What are your top five tips in terms of what people can really do to try and save some money at the pump right now?

TED ROSSMAN: Let's start by using the right credit card. So it's probably not the one from the gas station itself. Those don't have great rewards. The interest rates are high. What I would suggest is get a card that gives, let's say, 5% cash back on gas-- something like the Sam's Club Mastercard, for example.

The Chase Freedom flex and Chase Freedom Unlimited are giving new customers 5% cash back on gas in their first year. The Costco Anywhere visa is popular as well-- 4% cash back on gas. Those warehouse club cards are great because the gas rewards are good anywhere, but they also have their own really good gas prices at their own stations.

A couple other ideas would be to stack discounts. So combine that rewards credit card with grocery rewards. Chains like Kroger, Safeway, Albertsons-- they can turn grocery rewards into fuel discounts. And then you combine that with the rewards credit card for added impact. One similar tip is to use the gas stations' app. Their payment apps usually give you $0.05 or $0.10 off per gallon. Combine that with a rewards credit card.

- Ted, have you seen-- when you talk about higher gas prices, people are looking to save. How is this, though, affecting how people are spending over the last couple of weeks?

TED ROSSMAN: You know, I think it's very psychological more than anything else. To be honest, gas is a smaller part of the household budget in most cases than things like food and housing. But of course, those are going up too. So that's where we have this cumulative effect. And then anybody who has variable rate debt like a credit card-- well, that's going up. I think that's really what squeezing people.

So yes, you can't miss those gas station numbers. And they are in bright red letters in many cases-- or numbers. You know, I think that that is psychological. We definitely see people cutting back on vacations. We found that about 7 in 10 vacationers are making changes because of inflation. So they're planning fewer trips. They're traveling shorter distances and picking cheaper activities. It's definitely having an impact.

- And you say you can shop around, Ted. How much can you save? And how do you do it? Are there apps that we ought to be downloading?

TED ROSSMAN: There are some apps. Take it with a grain of salt, though. Apps like Upside and GasBuddy-- they could be helpful. But sometimes the info is outdated. I recently got tricked. And I thought I found a great deal. And I got there, and it was $0.90 higher per gallon than the app said. So they can't quite keep up with the price changes sometimes.

I think that it is important to shop around. Just keep your eyes peeled as you drive around. Keep in mind those warehouse clubs. Again, those memberships could really pay off for gas savings and food. In some markets, you could save $0.50 maybe even a full dollar per gallon at a place like Sam's Club or Costco. And then if you get their credit card, you could save even more on top of that.

- Now, I'm one of these people who likes to stack the discounts. I've got the app, the groceries, the right credit card-- I'm stacking it all. But what about us as drivers? What can we do in terms of our actual behavior to, perhaps, make our gas stretch a little bit further?

TED ROSSMAN: There are actually some things you can do with your driving behavior. So you want to make sure that you're carrying less weight around. So if you've got a whole bunch of junk in your trunk, clean that out. Don't drive too fast. There's a real dropoff, especially after 55 or 60 miles an hour. If you go a lot faster than that, you're burning a lot more gas. Also things like braking excessively, make sure your tires are properly inflated-- all these maintenance tips can actually help a bit too.

- Ted, when you take a look-- I was looking at your notes here. Most major gas brands have payment apps that give you $0.05 to $0.10 off per gallon. Are there certain companies-- certain gas stations-- that you see leading the way on this, where people, if they have the choice, they should favor, I don't know, say, Gulf instead of Valero or another option out there?

TED ROSSMAN: I think with those apps, it's pretty universal, actually. Something like $0.05 or $0.10 off per gallon-- that I like. The gas station credit cards also give you $0.05 or $0.10 off per gallon. But that's very limiting because you have that card, but it's only good at that one specific station. And getting 5% cash back on, say, $5 per gallon is a way bigger discount than just a flat $0.05 or $0.10.

With the apps, also, they're free. They're easy to download. So I think you could kind of mix and match, whereas with the credit card, it's more of a hassle and an impact on your credit to apply. It's not great benefits. So I'm all about the apps. I don't really like the gas-branded credit cards, though. Go with a general purpose option.

- Ted, it may sound silly. But are we at the point where we're going up a nickel a day, a quarter of a week, that it makes sense to buy a couple of gas cans and actually stock up on it in your garage or outside? Are we at that point?

TED ROSSMAN: You know, I don't know. Maybe it adds up a little bit. I have one for my lawnmower. You know, I don't know if it makes that much of a difference for your car, to be honest. But it is true that these prices are going up all the time. What's really sad is you hear about some lower-income people that-- maybe they don't have enough money right now to fill up the whole tank. So they're trying to calculate, like, what do I need to get me around next week till payday? I think that's where people really feel it.