Rewards credit cards can be insanely lucrative, both in terms of their ongoing rewards and the generous sign-up bonuses they offer. Unfortunately, the best credit cards on the market are only available to consumers with very good or excellent credit, which usually means a FICO score of 740 or higher.
But, you can get a rewards credit card if you have bad credit. You just need to adjust your expectations and be willing to consider a broad range of cards. Specifically, you may find that most rewards credit cards for bad credit are ones geared to specific purchases, such as gas.
What is a gas card?
Gas credit cards can help you rack up rewards when you fill up your tank, but you can also use them to build up your credit score so you can qualify for a better rewards credit card later on. Most gas credit cards offer rewards as a percentage of your spending just like any other cash back credit card, although credit cards for bad credit tend to have less lucrative rewards programs and more fees attached.
Keep in mind that, when we’re talking about gas cards for bad credit, there are two main types to consider. There are closed-loop gas cards that are only good for gas and other purchases with specific brands, such as Shell or Chevron. One thing to consider as you compare cards is the fact that closed-loop gas only credit cards tend to come with incredibly high interest rates. Take the ExxonMobilTM Smart Card, for example. This card gives you 25 cents back for each gallon of gas you buy for two months, then 6 cents back per gallon. However, you’ll pay a variable APR of 26.49 percent on purchases if you carry a balance.
There are also traditional credit cards that let consumers earn rewards on gas and other types of purchases. These cards tend to be more useful since you aren’t limited in terms of the gas stations you can fill up at, and since you can use them for all your regular purchases and not just gas.
How do gas cards work?
If you’re wondering how to get a gas card, you should know that the process is a piece of cake. Gas credit cards are easy to apply for online, although credit requirements can vary depending on the type of gas card you’re considering. The best gas credit cards that let you earn rewards are typically geared to consumers with good or excellent credit, while consumers with only fair credit (580 to 669) or poor credit (579 or below) may only be able to qualify for rewards credit cards for bad credit or a store brand gas card.
Some gas cards let you earn points or cash back for each dollar you spend on gas and other purchases, yet closed-loop gas cards that only work with a specific gas brand may offer a discount for each gallon of gas you buy instead.
At the end of the day, the benefits of picking up a gas card depend largely on the card you get approved for and their specific rewards program. Just remember that, like all credit cards, gas cards charge interest when you carry a balance, so you’ll want to pay your gas card bill in full each month you use it.
Building credit with a gas card
Building credit with a gas card is a smart move, just like it would be with any other type of credit card. Whether you use a gas-only credit card or a rewards credit card for bad credit, all of your credit movements and payments will be reported to the three credit bureaus—Experian, Equifax and TransUnion.
To make the most out of your gas card, you’ll want to use it for gas and other purchases you can pay off right away. Try not to carry a balance since your interest rate will likely be on the high side, and steer clear of racking up debt you can’t afford to repay.
Pros of building credit with a gas card
Some gas cards are fairly easy to get approved for, either because they are gas-only credit cards or they’re regular rewards cards that are geared to consumers with poor credit
Gas cards report to the three credit bureaus, which can help you build credit over time
Gas cards can help you earn rewards or discounts when you fill up
Cons of building credit with a gas card
Gas cards for bad credit may only offer so-so rewards
You may have to pay an annual fee, and many gas cards come with a high APR
Some gas cards for bad credit are secured credit cards, meaning you have to put down a cash deposit as collateral.
Best gas cards for bad credit
When it comes to gas cards for poor credit, there are quite a few options to consider. The following list of credit cards includes the best gas cards for bad credit on the market today.
Discover it® Secured: Best secured card for gas rewards
Because it’s a secured credit card, the Discover it® Secured is one of the easiest gas cards to get approved for. You’ll have to put down a cash deposit as collateral to get started, but this card will report your credit payments to the three credit bureaus, helping you build credit over time. There’s no annual fee and no hidden fees, yet you’ll earn 2 percent back on the first $1,000 you spend on gas and dining each quarter (then 1 percent) as well as 1 percent back on all other purchases. Discover will also match all the rewards you have earned after the first year.
Journey Student Rewards from Capital One: Best gas card for students
The Journey Student Rewards from Capital One is geared to students and other individuals with “fair” credit, which usually means anyone with a FICO score in the 580 to 669 range. This card doesn’t charge an annual fee, yet you’ll earn a flat 1.25 percent back each month you pay your credit card bill on time. If you don’t pay your bill on time, you’ll earn a flat 1 percent back in rewards. Note that, while you may start off with a low credit limit with this card, Capital One will automatically consider raising your limit after six months and six on-time credit card payments.
Credit One Bank® Unsecured Visa® for Rebuilding Credit: Best for building credit
The Credit One Bank® Unsecured Visa® for Rebuilding Credit is geared to consumers with poor credit, so it is one of the easiest gas cards to get by far. Once you’re approved, this card lets you earn 1 percent cash back rewards on gas and groceries as well as monthly mobile phone, internet, cable and satellite TV services charged to your card. Note that an annual fee of up to $99 might apply depending on your creditworthiness. However, you may get the chance to have your credit limit increased after enough responsible use, and this card even lets you pick your credit card payment due date.
Shell | Fuel Rewards® Card: Best for easy approvals
If you are looking for an easy approval gas card, you should consider the Shell | Fuel Rewards® Card. This gas store credit card lets you earn up to 10 cents off per gallon of gas including your gas card discount and the discount you get with automatic Gold status within the Shell Fuel Rewards program (up to 20 gallons). With the Shell | Fuel Rewards® Card, you can also qualify for 10 percent in Shell rebates on your first $1,200 in Shell non-fuel purchases made each year with your card at Shell locations around the U.S. This card doesn’t charge an annual fee, and you can apply online.
Chevron/Texaco Techron Advantage Card: Best for big gas discounts
The Chevron/Texaco Techron Advantage Card is another easy approval gas card that can work well for consumers who are looking for a Chevron gas card for bad credit. This gas only credit card lets you earn 30 cents per gallon in Fuel Credits at Chevron and Texaco stations for the first 90 days once you open your account. You’ll also earn 3 cents per gallon on every fill-up year-round (on Regular or Diesel), 5 cents per gallon on Plus Fuel or 7 cents per gallon on Supreme/Premium fuel. You can pick up this credit card without having to pay an annual fee or any hidden fees.
Are gas cards worth it?
Consumers looking for a way to build credit should absolutely look into gas credit cards, whether secured or unsecured. Gas cards can help you build credit while you learn positive credit habits, and you can even score some rewards or fuel discounts along the way.
Just make sure that you’re comparing gas cards for bad credit in terms of their fees and their rewards, and that you only apply for a store-branded gas card if you fill up with that brand frequently. Hopefully, you can get approved for a gas card and use it to rebuild your credit from the ground up. With the passage of time and plenty of on-time credit card payments under your belt, you should be able to upgrade to a better rewards credit card in no time.