Personal Financial Tips

Archive for January 5th, 2012

The Advantages and Disadvantages of Discounted Prepaid Gas Cards

Introduction

The energy crisis has hit the world by storm and now many people are finding that the same amount of money is starting to buy them a whole lot less. Indeed, nobody can blame you for being angry about higher prices of energy, simply because the economy has really been built on the idea that oil would always be plentiful and cheap. Without that concept in place, not only is gas going up with the basic necessities of life that are transported using gas are rising in price as well, really placing the average person between a rock and a hard place.

For that reason, many companies have now offered their customers discounted prepaid gas cards. As the name suggests, these cards can be used at gas stations in order to gain a discount on gas, with the catch that you need to load them with money before you make the actual purchase. Depending on the card, you can either reload it when it runs out or alternatively you might need to get a completely new one from the gas station and throw the old one out. Many people are intrigued by these types of offers, but would like to know what the advantages and disadvantages are of such an arrangement. The best way to determine this would be to look at several factors and determine if those factors are advantages or disadvantages to the overall idea.

Price

The most important factor involved with discounted prepaid gas cards is of course price. They would not exist without price, so it is definitely the determining factor in many cases. And if you look at it from the point of view of the actual amount of money that you pay for gas, you will find that price is decidedly one of the big advantages of these discounted prepaid gas cards. They do allow you to get a discount in the gas price and for that reason are definitely useful things to have.

At the same time however, it is important to consider the other factors that might limit how much of an advantage price is. For example, if you look at price from a monthly budget point of view and then consider that you have to load money onto the card before you actually buy the gas, you might end up with a situation where the change in your cash flow is more than the card is worth. Additionally, a particular card might only work for a particular company’s gas stations, which is another thing that you might need to consider. What use is having a discounted prepaid gas card if you have to drive further to get to a gas station where you can use it?

Overall, price is still an advantage, but for people that live close to gas stations where they can get the discount and are good at managing their cash flow, the advantage involved is far greater.

Convenience

Convenience is another interesting factor and one that is definitely worth further consideration. The convenience involved with a gas card is that quite frequently you can use the gas card to pay at your pump rather than walking into the station and paying where the actual gas station attendant is seated. This is something that can be very advantageous if you are in a hurry and for that reason is definitely something that increases the level of convenience that you might feel.

On the other hand, most of the gas stations in the country already do have some sort of plastic card payment slot. In other words, you can already pay for gas at the pump in most cases through the use of credit cards and debit cards. This means that the advantage that you gain from gas cards is negligible and since many gas cards actually need to be validated at the counter, this might actually be something that is somewhat disadvantageous.

If you are tied down to using your gas card as opposed to a credit or debit card when you are at the gas station, then you might get yourself into a situation where paying at the pump is impossible because the attendants need to validate your discount. While such situations are rare, they have been known to happen.

For this reason, the convenience factor involved is actually a disadvantage, since being tied down to using discount prepaid gas cards can actually make things less convenient for you.

Hassle

The last factor worth considering is hassle, which is something that is similar to convenience but not exactly the same. Where convenience deals with your interactions with the gas station using the gas card, hassle rather deals with what happens when all of your purchasing is tied directly to the card. For the most part, there is really nothing to gain from having this, aside from the price considerations that have already been discussed in previous sections.

On the other hand, there is a lot that you can lose. For the average person that pays for gas with a credit card and then drives away within a few seconds of having pumped the gas, the potential problems that could arise with a discount prepaid gas card could delay them by quite a large margin. In addition to this, the discount prepaid gas card is yet another card that must be carried around and that in turn means that it is just one more card that you can potentially forget. Driving back to get it would likely negate the discount that you get.

Overall, discount prepaid gas cards are disadvantageous because of the potential for hassle that exists in their use.

Conclusion

Overall, discount prepaid gas cards provide you with cheaper gas, but they are less convenient and less hassle-free than their credit and debit card counterparts. However, for most people, the discounted gas is worth the potential for extra hassle and for that reason they are still overall more advantageous than disadvantageous to have.

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