Paying for Gas With Debit vs. Credit Card: What’s the Difference?

Paying for Gas With Debit Card vs. Credit Card: An Overview

Which should you use for everyday purchases, a debit or a credit card? You may not think that there is much of a difference between these two options but a closer examination reveals there are a number of advantages to using a credit card, especially when you're filling up your tank at the gas pump. Not only does using credit provide a greater sense of security from possible fraud, but most credit card companies also offer cardholders some sort of reward for using their cards for gas.

Using a Debit Card at Gas Stations

Using a debit card to pay for gas may seem like the better option. That's because you don't have to worry about not paying for your gas later. Since you're using a debit card, the money generally comes out of your account immediately. This allows you to avoid paying heavy interest charges. And to top it all off, you can certainly avoid overspending because you can only spend the amount of money available in your bank account.

Some stations offer tiered pricing—one for cash and one for credit. In most cases, you'll get the cash rate if you use your debit card. These retailers generally charge their customers less (sometimes as much as a dime) if they pay for their gas with cash or a debit card. But to avoid any confusion, be sure to ask the attendant before you use your card to fill up.

But there are drawbacks to being able to access your money instantaneously when you're at the pump. Gas stations aren't immune to data breaches, resulting in millions of stolen debit card numbers and account information. Federal regulations treat debit cards differently than credit cards and your liability is based on how quickly you report your being compromised. This could be $500 or more.

Using a Credit Card at Gas Stations

Credit cards allow you to purchase fuel (or other goods and services at gas stations) without having to worry about having to part ways with your money right away. This is true as long as you have the available balance on your credit line. Using a credit card gives you as many as 25 days until the balance is due. And you'll avoid interest charges if you pay off your balance every month. If you don't, you will incur interest and other fees (late fees if you don't pay on time), which can make that fill-up even more expensive.

Many credit card companies offer their cardholders more protection against identity theft than is available to debit cardholders. This alone is a strong vote in favor of using your credit card at the gas pump. Additionally, avoiding identity theft protection isn’t the only benefit. Some credit cards offer rewards in the form of airline miles, hotel points, or cash-back incentives.

The key is to use your credit card like a debit card and only charge what you can pay at the end of the month. You don’t want to be charged an extra 20% in interest to put gas in your car, but if you can’t pay off your balance each month, then you will incur interest at the annual percentage rate (APR) associated with your card. In the case of people who have problems controlling their spending, debit card purchases are a clear choice.

Special Considerations

Think about the many stories you’ve heard about data breaches and consumer fraud, then consider that gas stations are on the front line of this trend. The gas pump is one of the easiest places for fraudulent activity to occur against anyone using a card.

Debit and credit cards both have consumer protections that leave you free of liability for most transactions. However, you get a little less protection with a debit card if you don’t notice the fraudulent charges within two days. You could be on the hook for as much as $500 if you report the problem from three to 60 days after the transaction. Credit cards set your maximum liability at $50, and many advertise zero liability.

Top Credit Cards for Purchasing Gas

In addition to some of the rewards you can earn by using a credit card at the pump, there are a few particular cards that offer bonus points on gas purchases.

American Express Blue Cash Preferred Card

The American Express Blue Cash Preferred Card provides cash rewards. If you're a new cardholder, you can benefit from:

• 0% intro APR for the first 12 months
• N fees on Buy Now, Pay Later plans (which allows you to break up large purchases into smaller, equal payments) for the first 12 months
• $300 in cash in the form of a statement credit when you spend $3,000 on the card within the first six months

After the intro offer, you'll earn 6% on groceries, 6% on streaming services, and 3% on transit (taxis, ridesharing, and tolls among others).

The card has a $95 annual fee. Part of the welcome bonus for this card includes waiving the annual fee as well as an introductory APR of 0% for the first year.

Bank of America Customized Cash Rewards Credit Card

Bank of America's Customized Cash Rewards Credit Card is another cashback option. As the name implies, you can customize how the card pays you your rewards so you can earn 3% in the category of your choosing, including gas, online shopping, and home improvement. Bank of America pays you 2% when you use the card at grocery stores and wholesale clubs (like Costco) and 1% on all other purchases.

New cardholders can earn $200 if they make $1,000 or more in purchases within the first 90 days of opening the card. There's also a 0% intro APR offer for the first 15 months after which the APR ranges becomes 13.99% to 23.99%. And there's no annual fee.

Citi Premier Card

If you’re a frequent traveler who believes that earning travel rewards is essential, then consider using the Citi Premier Card for gas purchases.

In addition to earning 60,000 bonus points after you spend $4,000 in the first three months of usage (redeemable for $600 in gift cards), you can earn three points for every dollar you spend on any travel purchase, which includes not only gas but also airfare, restaurants, hotels, and more.

The card has a $95 annual fee and it offers a variable APR, which ranges between 15.99% and 23.99%.

PenFed Platinum Rewards Visa Signature Card

The PenFed Platinum Rewards Visa Signature Card requires you to become a PenFed Credit Union member but has no annual fee and offers a variable APR based on your credit rating of 3.49% to 17.99%.

New cardholders can take advantage of the intro offer of 0% for balance transfers for the first 12 months and a welcome offer of 15,000 bonus points when you spend $1,500 in the first 90 days of opening your account.

You can also earn five points for every $1 you spend at gas and electric vehicle charging stations and three points for every dollar you spend at grocery stores, including most Walmart and Target locations, restaurants, and streaming services.