Gas more expensive when paying with credit cards?
The high price of gas might make you stop paying at the pump.
Some gas station owners have banned credit-card transactions entirely. Others are charging more for the privilege of paying with plastic.
I have heard of stations locally --- on Falls Road in Hampden, on York Road in Timonium and near Taylor Avenue in Towson --- that have set two different prices per gallon of gas: one for those paying with cash and another for credit cards.
The difference can be as much as 10 or 12 cents a gallon. One of my friends, faced with the prospect of paying nine cents more per gallon, said she got back in her car and drove to another station.
She wisely did not pay the extra fees to use the ATM at the station, which would have charged her a fee --- along with her bank.
Why the difference?
Credit card companies don't just make money from interest rates on revolving balances.
They also charge merchants a percentage of the purchase price on each transaction --- usually about two to three percent.
Gas stations are one of the few businesses allowed to set different prices for credit card purchases --- most businesses aren't allowed to set minimum purchases, according to a column Dan Thanh wrote earlier this year.
(photo: Monica Lopossay/Baltimore Sun)


Comments
I'm with your friend. If I start seeing two different prices for cash versus credit, I'm going on to the next station. I don't carry much cash and almost always want to pay at the pump. I am guessing the larger players in the gas station business will be less likely to try this, since they would be able to absorb those credit card processing costs easier.
I wonder if stations taking in a lot more cash would make them more inviting targets for robberies.
PK, I like the convenience of paying at the pump too ... the fewer encounters I have with potential impulse buys, the better. One of the commenters on the story itself wondered if drivers would be robbed while carrying huge wads of cash to fill up. --- lfk.
Posted by: PK | June 20, 2008 11:38 AM
Depending on your card, the credit prices may still be better than paying cash. For instance, my card offers 5% cash back on gas purchases. At $4.00/gallon, that's $.20. Still better than the cash price. Especially if the alternative station offers the same credit price (and no cash discount).
Good call, Mitch, for you and anyone else who doesn't rack up debt! Interest payments would eat up any benefits, of course ... --- lfk
Posted by: Mitch | June 20, 2008 12:38 PM
I cannot stand when I come across a gas station that charges 2 different prices for fill-ups. If this was 1980 I could understand this, but not in 2008 when plastic is as prevelent as it is. I could care less how much the station owners have to pay the credit card companies in transaction fees either. As far as I'm concerned that's just a cost of doing business, and they knew about it when they decided to get into the business of selling gas. It's not like gas stations are the only business that has to pay transaction fees either, EVERY single business that takes plastic has to pay them.
I have a small neighborhood gas station less than a 1/4 mile from my house that in 5 years I have NEVER patronized, simply because of the fact they charge more to fill-up using plastic. It boggles my mind that people accept this practice in this day and age where so many people use plastic.
Posted by: Steve | June 23, 2008 8:50 AM
I can remember back in the '80s when Getty proudly touted "Same Price Cash or Credit" at their pumps, and had ads attacking competitors who charged extra for using credit cards (Shell was one practicing this disguised as "Pay Cash and Save" -while they didn't even have to post the credit prices!) The ad compared the practice to a restaurant charging extra for a customer using a credit card to pay for a meal. The outrage practically made this injustice disappear by the end of the 80's, but with merchants losing profits with today's gas prices, it has crept back into play. Given $4+/gal, who's really going to have $75 or more in cash on them when they fill up ... unless they run to the ATM beforehand. What also bothers me is that there is no law nationwide to clearly post both cash and credit prices, should the stations choose to do this. And those stations who force customers to pay "cash only" better be fully insured - as they will become obvious targets for robberies. I don't have a Getty station in my area, but if they are still around (they're being rebranded as Lukoil nationwide) I'd like to know if they are continuing their practice of charging the same price, cash or credit - and if they are, perhaps rolling out those old ads from the '80s would help curb this injustice once again.
Posted by: Steve | July 21, 2008 10:46 AM