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Beware of catches in credit cards touting gas savings

If you're looking to get more mileage from your fill-ups at the gas station, a rewards credit card could be the answer.

With fuel costs eating into household budgets, card issuers are touting the accelerated rewards they offer at the pump. Be aware that these cards can come with a tangle of restrictions that limit how much you actually save.

"As consumers, you have to know what the ground rules are before you start to play the game," notes Bill Hardekopf, CEO of LowCards.com. That means understanding what all that fine print in your card agreement actually means.

There are two main ways you can go if you want a card that defrays gas costs. General rewards cards often let consumers earn accelerated rewards on select categories, such as groceries, restaurants or travel. Most cards don't offer accelerated rewards for gas, but among those that do, the average rate is just under 3 percent, according to Card-Hub.com.

If you're loyal to a particular brand of gas, companies such as BP, ExxonMobil and Shell also issue their own cards. These cards offer richer rewards on gas, but can come with considerable restrictions. The rewards for other spending categories tend to be more limited too.

Whichever option you chose, here's what to watch for:

> Earning rewards

The prospect of earning accelerated rewards for fuel is a powerful selling point these days. Just be sure that you're actually racking up those promised riches once your card is in hand.

With the Chase Freedom card, for example, cardholders can earn 5 percent back on select spending categories each quarter. For the July to September period, the categories are gas, hotels and airlines.

But the card requires you to actively sign up for the higher rewards each quarter. If it slips your mind, you can still get the points retroactively as long as you enroll by the end of the quarter. Customers are also sent reminders ahead of each quarter to enroll, notes Gail Hurdis, a Chase spokeswoman. But she declined to say what percentage of customers regularly remember to do so.

In other cases, carefully read how long the accelerated rewards will last. The BankAmericard Power Rewards, for instance, gives triple rewards on gas, grocery and pharmacy purchases. But that accelerated rate only lasts for six months after the account is opened.

Alternately, a higher earnings rate may not kick in until you've reached a certain spending threshold. So be sure your spending habits are in sync those requirements.

The other catch to keep in mind is that there could be caps on how much you can earn. So even if 5 percent sounds extremely generous, the potential savings may be finite.

With the Chase Freedom card, the accelerated 5 percent rate only applies to the first $1,500 you spend on the selected categories. So the most you can earn on those categories is $75 over three months.

> Redeeming rewards

As savvy as you may be about racking up rewards, cardholders often aren't diligent about redeeming their rewards. It's similar to the consumer psychology at work with rebates: the promise of an incentive or rewards can be persuasive, but not everyone follows through to claim their savings.

One way to prevent inertia is to set up automatic redemptions on your account. Some cards let you do this at certain intervals, perhaps every time your rewards reach $25, $50, $75 and so on.

Otherwise, make a point of checking in once every few months to see whether it's time to cash in. Or you might find your rewards have vanished. With the Shell MasterCard, for example, reward rebates expire 12 billing cycles after they're earned.

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