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Paying By Credit Card At the Gas Pump and Refusing To Use Cash

Published 6/25/08 (Modified 3/8/11)
By MoneyBlueBook

Oh great - well I hope this article doesn't foretell or signify a trend that's going to be widely picked up by the gas industry in the coming future. While they've been one of the most credit card friendly industries in the past, some gas station chains are apparently starting to scale back their payment options in favor of cash due to diminishing profit margins caused by higher gas prices and rising credit card interchange fees. The credit card interchange fee, a percentage of the total sales price paid to credit card companies by the merchant on every transaction, is usually fixed at somewhere just under 2% - but the dollar amount of the fee rises with the price of the goods or services. As gas prices have risen dramatically, so have the credit card acceptance fees that gas pump merchants pay, drastically cutting into their profitability.

I Always Use My Credit Card To Pay For Gas And Don't Intend To Change This Payment Practice Anytime Soon

While I understand why some gas station owners and advocates are pushing for the move back to cash payment only for gas purchases, I hope this is not an emerging or widely adopted trend. Paying cash at the pump may work for some, but it's not going to fly for me.

I take frequent road trips and one of the most appreciated benefits of fueling at the gas pump is the ability to easily slide into a gas station off the freeway, punch in my prepayment, fuel up, and get out quickly. With a gas credit card, I can do that easily. With just a quick swipe and the press of a few buttons on the automated gas pump, my car is instantly refueled without hassle. With cash payment, not only is the practice comparatively more time consuming, but it's a major inconvenience for those of us who have grown dependent on using our credit cards to pay for everything. I rarely carry more than $50 worth of emergency cash in my wallet and dislike the annoyance of walking around with dollar bills and loose coins jiggling around in my pockets. My efficient credit card usage habit also stems from my view that handling paper money is inherently dirty and unsanitary. I'm by no means a germa-phobe, but I feel that money is one of those heavily transacted items that you never truly know where it's been before. For all I know, the bills were last taken out and manhandled by some hairy, sweaty dude while he was sitting in a bathroom stall doing his business somewhere. Hey, you never know. With my personal credit cards, at least I know where they've been and while I've never actually cleaned them before, they are at least washable.

I don't know what I would do if gas stations suddenly and uniformly stopped accepting credit card payments due to their displeasure at having to pay spiraling credit card interchange fees. While I sort of vaguely sympathize with their declining profit margin plight (not really), as an oil consumer, I'm bound to take my gas business elsewhere to a place that does accept credit cards. The convenience of using my trusty gas rebate credit card to pay for gas and earn cash back rewards at the same time is not something I'm willing to give up anytime soon. I've been known to stop at a low priced gas station only to drive off immediately after finding out the place only accepted cash payment.

In the Washington D.C. region, there is a chain of el-cheapo gas stations called Free State that is known for offering greatly discounted gas at prices that's frequently much lower than that offered by more recognized competitors. However, the biggest downside is that they only accept cash payment. Obviously this is to keep prices low and avoid having to pay merchant fees to credit card companies for each credit card transaction. But for heavy credit card users like myself, this is a complete deal breaker. While I see them everywhere along my driving route, I always avoid Free State gas stations because of their cash only payment policy. I would rather drive across the street to a slightly more expensive gas pump than deal with the inconvenience and hassle of paying by cash. It's just one of those expected perks in life that I've come to insist on and demand. Other local gas station chains sometimes offer discounts for cash payments, but I would still rather pay the slightly higher fuel rate just to have the benefit of paying by plastic. Besides, any potential cash payment discount offered by the pump owner will be unlikely to offset the nice gas credit card rewards that I earn using my usual method of payment. I don't expect or intend to give that perk up anytime soon as long as they are around.

I Have Also Come To Rely On The Budget Tracking Benefits That Credit Card Usage Affords Me

It's not just the convenience and speed at which credit card payment at the gas pump affords me, it's also the record keeping benefits as well. I pay by credit card at gas stations, restaurants, and everywhere else because it affords me convenient and reliable expense tracking. Payment by cash requires me to retain all of my paper receipts to keep track of total monthly spending. Credit card payments on the other hand allow me to permanently record and retain transaction dates and pricing information on my credit card statement to access at a later time of my choosing. I can easily log onto my online account from home to review the frequency of gasoline fill ups and the amount of money spent per visit with a just few key strokes.

Change Might Be A Good Catch Phrase For Politics, But It's Bad When It Comes To How I Pay For Gas

Knowing the pervasive and established nature of credit card payment at the pump, I think most major gas stations like Exxon Mobil, Shell, BP, and Sunoco are unlikely to go cash only no matter how high gas prices may go, and no matter how badly their financial bottom lines will be hurt by having to pay higher transaction fees. Such brand name gas stations are likely to find other ways to cut costs than deprive consumers of this important convenience. Besides, switching to cash only would probably hurt their revenue stream more detrimentally than any potential cost saving benefits from going all cash due to loss of business volume. They'd lose the patronage of gas guzzling, dinosaur liquid loving, weekend road warriors like myself.

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5 Responses to “Paying By Credit Card At the Gas Pump and Refusing To Use Cash” 

  1. Richard @ StudentScrooge says:

    I agree with you completely -- paying for gas with a credit card adds both convenience and speed and makes it easy to track expenses. I would be very surprised if "banning credit cards" catches on -- too many people feel the same way, I think.

    Cash discounts, on the other hand... I don't know how I feel about those. As a heavy credit card user, I don't like it from an egotistical perspective, but that may be a fair middle ground for gas station owners to take.

  2. JB says:

    I only purchase gas from ARCO in CA. ARCO does not accept credit cards at all. They accept debit cards with a .50 cent transaction fee. They have the cheapest gas in my area, so I only pay cash for gas. I am guessing the reason they are the cheapest station around is that they aren't incurring/eating transaction fees from cc & debit cards, and they can offer the gas slightly cheaper?

    Works for me!

  3. Raymond says:

    JB,

    You're right. Cash only gas stations are almost always cheaper than "regular ones". While location is the most determinative factor regarding gas prices, I've found certain gas pump brands are generally cheaper - 7-11, Costco gas stations, Hess, Citgo, etc. I personally view gas as a generic substance (like water) with little differentiating characteristics from one brand to another, so I always go for whatever is the cheapest. Of course, I always make sure they accept credit card payment though...never really got into the habit of using cash

  4. Eric L says:

    While it can be inconvenient, paying with cash is not that big of a deal. I'm trying to figure out why anyone would drive to a more expensive station for the "convenience" of using a card. Its just not really worth it.

  5. James Baker says:

    "but it's a major inconvenience for those of us who have grown dependent on using our credit cards to pay for everything"

    yeah and sacrificing anonymity for the sake of "convenience". people such as yourself are the reason why we are losing our freedoms bit by bit.

    governments with their partners in the banking industry have been brainwashing the people (such as yourself) to reject cash in favor of fake plastic money that tracks your every purchase.....

    when cash is gone, big brother wins....I only use credit cards for LARGE purchases such as appliances.......I dont use credit cards to buy a $0.99 bag of chips like many idiots do..............

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