Some gas stations offer discounts for customers who use cash instead of credit. But if you’re not paying attention, those discounts could leave you paying more to fuel up.
For example, one Consumer Reports editor recently used her credit card to buy gas at a Long Island, N.Y., station, not realizing that the price she thought she was being charged was based on a cash discount of a whopping 70 cents per gallon. She ended up paying nearly $13 more for the 18.5-gallon purchase than she would have had she used cash. We've seen reports of other consumers unintentionally paying more as well.
While the difference between the cash and credit prices at gas stations typically is much lower— about 5 to 10 cents a gallon, according to the National Association of Convenience Stores— there have been reports about stations’ charging credit card customers as much as $1 more per gallon than those paying with greenbacks.
Station owners who offer cash discounts point out that when accepting credit cards, they’re charged bank fees, which average about 2 percent of the cost, or eight cents a gallon when gasoline is $4. (For debit cards, they're charged an average of 24 cents for the entire transaction — although that could be lowered as a result of a federal court decision in July). While 10 states prohibit stations from passing on that cost to credit card customers in the form of price surcharges, stations are permitted to offer cash discounts, even though, from a consumer perspective, it probably doesn't make a difference whether it's called a surcharge or discount.