Why do gas stations have a cash and credit price?

INSTEAD of rummaging through your wallet to find the exact change, whipping out a credit card is far more convenient.

However, you sometimes pay more using a credit card, for example at gas stations.


Seen through the Mobil gas station price tag, cash is priced at $5.79 while credit costs 10 more cents.Credit: EPA

Gas prices are still Skyrocketing, with the nation’s average at $4,236 per gallon per AAA.

With some states proposing gas rebate programs or free gas giveaways, Americans are looking to save every penny to make up for the soaring costs.

One simple way is to use cash during your weekly gas station visit. If you looked closely, gas stations have different prices for cash and credit options.

Credit card companies like Visa or MasterCard charge merchants a credit card fee, meaning places like gas stations need to pay the companies some fee whenever customers pay with a credit card.

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Since Visa and MasterCard didn’t allow merchants to surcharge until January 2013, gas stations in lieu offered a discount for paying in cash.

Despite the still-existing price difference, the becoming made it sound like there was a discount for cash-payers instead of an additional charge for credit card users.

Now, with credit card surcharges legalized, gas stations have two different prices for cash and credit.

Reported by Nerd Wallet, gas stations are usually the only places to have a distinct price difference, and that is because they are only selling one thing – gas.

Regular, Extra, and Supreme+ all have higher prices for the credit card option.


Regular, Extra, and Supreme+ all have higher prices for the credit card option.Credit: Getty Images

With primarily one product, it is fairly easy for gas stations to price their product, while places like grocery stores may have more difficulty appointing two different prices for everything they sell.

Despite its legal standing, there are some rules merchants have to keep in order to surcharge.

  • Merchants need to clearly inform all customers for credit card surcharges. The exact surcharge also needs to be written on the receipt.
  • Surcharges can only be the exact credit card transaction fee, which is aroud 1 to 3.5 percent of the purchase. This means that merchants are not allowed to make any profit from surcharges.
  • Different states have different laws, so it is crucial to check your own state rules. Per NCSL, eleven states forbid merchants from placing credit card surcharge responsibilities on customers. The eleven states include: California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma, Texas, and Puerto Rico.
  • Surcharges can only be charged to credit card payers, not debit card users.
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According to GasBuddy’s Patrick De Haan, gas prices are usually the cheapest during the beginning of the week.

To save some bucks, visit the gas station on Monday or Tuesday and pay with cash or debit card.

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