Our good friend Mr Credit Card from Ask Mr Credit Card is going to share some of his thoughts today about the importance using and earning cash rebates in today’s “inflationary environment”.
In 2008 when the US was facing it’s worst financial crisis, and while sub primes mortgages were bringing banks down, the rest of the world was still booming. Commodity prices were skyrocketing. Oil prices reached $140. US consumers were really hurt by that. It was during that period that gas rewards credit cards became really popular for the simple reason that you could get 5% rebates for simply paying for your gasoline with your credit card.
But it was also during that period that credit card issuers began scaling back on their rewards and rebates that they paid for gasoline purchases. Instead of offering the standard 5% rebates on gasoline purchases, they began to scale it back to 2%, 3% or 4%. Some issuers even put a cap on the monthly spend that you are allowed to earn above the standard 1% rebates. But still, these cards became popular because they really helped consumers save money on gas.
Then in 2009 and 2010, gas prices went back to sane prices as the global economy took a hit. But with QE2 and more money printing, the Federal Reserve exported inflation globally thought inflation at least for the moment seemed contained in the US. But as the world economy and emerging markets keep chugging along, oil and food prices are increasing again (especially since they are priced of the US Dollar). In fact, rising food prices has been partially blamed for the middle east crisis.
For the middle to lower income folks in the US, folks are feeling the pinch of higher food and gasoline prices. And that is why I think it is important that folks make use of cash back credit card rewards to lower the cost of their food and gasoline purchases. There are several ways to accomplish this. Here’s how.
Ending Thoughts – With Oil and Food prices rising again, I think it is important that we use every tool available to save money on these items. There are many things you could do – drive less, car pool, grow your own vegetables. But for most folks, simple coupon cutting and wise use of a cash back credit card that gives rebates on gasoline and supermarkets will go a long way towards helping your reduce your gasoline and grocery bills.
NerdWallet note: Check out our post on how to save the most money on gas – discount gas stations vs gas credit cards. The results might surprise you!