(August 16, 2019) BOSTON — Fuel purchases in the United States are among the biggest opportunities for banks and credit card companies to win the battle for the consumer’s wallet, with Americans collectively spending close to $1 billion on gasoline per day. And yet, despite 81% of Americans having at least one credit card, more than half of Americans use debit cards instead as their primary method at the pumps, according to GasBuddy’s Fuel Payments study issued today.

GasBuddy surveyed more than 1,600 consumers in an effort to better understand the payment methods primarily used on fuel purchases and the reasons behind each payment method.

Gas is considered to be one of the top expenses in a majority of household budgeting, according to 51% of those surveyed. Adding context to these insights, GasBuddy’s fuel payments program, Pay with GasBuddy, with nearly 600,000 members, finds that drivers fill up an average of 4.5 per month, with the average fuel purchase amounting to more than $30 per transaction.

Ninety-one percent of respondents stated they own at least one credit card in the study, with many respondents (36%) holding as many as 3-4 credit cards. Even with the high credit card ownership, 51% of respondents still use their debit cards as the preferred form of payment for fuel. Only 37% of participants use credit cards as their primary fuel payment method.

The top reasons respondents use debit cards for fuel payments include that debit cards are easy to use (1), they receive a discount over the credit price for fuel with the debit card (2), and "it's just what I'm used to" (3).



“Credit can be highly problematic for many consumers, and at the end of the day people just want the best price every single time,” says Sarah McCrary, CEO of GasBuddy. “Paying credit card interest on gas makes little sense, but that’s exactly what’s happening because the majority of credit card users actually carry a balance. 

"And cash back cards are great, but qualify as delayed gratification when compared to just getting the better price afforded by debit cards or cash directly at the pump.”

A significant number of debit card users in the survey choose debit for fuel payments because they receive a discount off of the credit card price on gasoline. Respondents may have chosen this answer because individual gas station owners have the option to charge the cash or credit price on debit transactions. In turn, some consumers get the ‘discounted’ cash price when paying with their debit card.



Consumers may also primarily use debit cards on fuel purchases because the advancements in digital payments over the past 10 years have led to the emergence of decoupled debit products and ACH backed payments that serve a large group of consumers who are wary of credit card complications, particularly in the fuel space. Companies including Target, Cumberland Farms, Phillips 66 and GasBuddy have established decoupled debit and ACH backed programs that provide consumers with rewards as well as an easy way to pay for their goods and services.

In addition, the Federal Reserve recently found that one third of Americans have been declined for credit in the past year. Of those who own credit cards, 26% have carried an unpaid balance once or some of the time, and 27% always have an unpaid balance on their credit card.

Survey responses from the GasBuddy study may highlight the underlying hesitation of applying for a credit card due to bad credit or no credit, as well as the hesitation to put more potential debt on current credit accounts. 

For the 37% who use credit cards as their primary fuel payment method, cash back rewards are the top reason to use credit rather than debit.