Credit, Debit Cards

Have Gas Station Owners Been Reading No Credit Needed?

I want to once again thank those of you who arrived here via this Money Magazine article about families who are living without credit cards.

If this is your first visit to my site, welcome.  I hope you will take a few minutes to read a bit more about me and about how and why I live without credit cards.  Now, today’s post:

According to this article – some gas stations have stopped accepting credit cards! Why?  From the article:

The National Retail Federation says gas prices point to the unfairness of the system: Gas stations are paying more in interchange fees because the price of gas has gone up, while the cost of processing credit or debit cards remains the same.

Credit card companies charge gas station owners (and all other merchants who accept credit cards)  an interchange fee – usually about 2% – each and every time someone uses a credit card to make a purchase.  Apparently, gas station owners have grown tired of sending credit card companies a cut of each sale – and some have gone to a ‘cash only’ policy.

Regardless of whether or not you agree with these changes, it might be time to start carrying a little more cash around, just in case you find yourself in an area where there aren’t any gas stations that accept credit cards.  (There are also interchange fees associated with the use of debit cards.  I’ll assume that a station that has stopped accepting credit cards has also stopped accepting debit cards, as well.)

For those, like me, who live in rural areas, this could be a very big deal.  In our small town, there are only four or five places to buy gasoline.  Personally, I use my debit card for most gasoline purchases, but I’m going to start adding a bit more cash to my ‘Gasoline’ envelope.  (For those of you unfamiliar with the envelope system – a great system for managing your cash – I have created a video detailing what it is and how to use it.)

I’m sure that most stations will continue to accept credit cards.  But, those who are traveling with children – or going out of town to unfamiliar places – might consider keeping a few more greenbacks on hand, just in case.

Side Note:  While I found this article very interesting, in my own experience, I’ve found that several gas stations appear to be encouraging the use of credit cards and discouraging the use of cash.  Many now require that users ‘pay at the pump’ or ‘prepay inside’ when using cash.  So, while the article is interesting, I’d really love to hear from my readers.  Have you experienced this in your area?  Are gas stations where you live going to a ‘cash only’ policy.  And, if so, how has (or will) this affect you?

33 thoughts on “Have Gas Station Owners Been Reading No Credit Needed?

  1. What worries me about this is the possibility of gas-station hold-ups and muggings. As it is, I often get asked for handouts when I gas up in the city, but usually I am paying on a debit card so I can honestly say I have no cash on me. However, if credit cards are not accepted, then it stands to reason that if I am about to pay to fill my tank I am carrying cash- and a fair amount to boot. Add that to the fact that I am travelling with three kids in tow; it makes me nervous.

  2. Yeah, that has happened here in central NC. We have three different gas stations who have started doing it. Two of them do not take anything but cash and one takes cards, but charges more per gallon (or rather gives a “cash discount”) if you use it. The other two that are cash only are 5-10 cents cheaper per gallon than any other station in town. They usually have lines, especially in the afternoons after people get off work.

  3. Many gas stations in Northern California accept both credit/debit and cash. However, some (not all) give a $0.10 to $0.20 per gallon discount when using cash, exactly for this reason. Also, the local ARCO near my house accepts only debit or cash, but if you use your debit, they charge YOU the $0.45 – another incentive to use cash.

    I’m definitely going to be switching to cash-only fill ups!

  4. In the western suburbs of Portland, Oregon I’m starting to see more and more gas stations have a “cash” price and a 10-cent higher “credit card” price. To top that off (no pun intended), the lower cash price is typically what’s displayed on the street-side signs to catch people’s attention and then the credit card price is displayed somewhere else that you don’t usually see until you’re filling up. Somewhat deceptive if you ask me. (Yes, the street-side signs to state “Cash Price” but that’s not what most people “see” because their eyes focus on the price. Oh well.)

  5. Gas stations here in Eastern Massachusetts still take credit cards, as far as I’ve seen. No separate cash vs credit pricing either. I haven’t seen that in a long time.

  6. It is actually amazing how much credit card companies charge businesses. You would think that would be enough and they huge fees, treating credit card holders like people to be ripped off… wouldn’t be needed – but you would be wrong. This is one reason gas stations and others try so hard to get you to use their credit cards (like the shell credit card…). I haven’t seen this myself and I don’t want to waste my time paying cash – having to go inside…

  7. I suspect that what you’re seeing in your side note isn’t gas stations encouraging credit card use, but requiring pre-payment due to increased drive offs.

    What they care about is that you pay first. Since they’re still accepting credit cards, pay-at-the-pump is one option. I recently drove from Cincinnati to Connecticut and every gas station along the way was pre-pay only. Of course, in Connecticut the gas was $4.40 a gallon, so they probably have significant numbers of people just filling up and driving off.

    Last year at a gas station south of Cleveland I saw a pre-pay system that could take cash at the pump. I’d wager you’ll see more and more of this.

  8. This has been a huge annoyance in the way people are treated in my opinion. The station in the article is actually just a couple of miles from where I live and it never seemed to get much traffic to me anyway. The thing that gets to me is how a lot of stations that have gone to this prepay with cash or Credit/debit card only at pump policies are now screaming about the fees being charged to them to use those cards. I think the fees are nuts, but then again Visa and Mastercard only ever look out for themselves and their profits. I like to use cash at the pump. Always have. I feel like I’m being treated as a prospective criminal by being forced to pay with cash first. I try my best to never go to pumps that are prepay only, but sometimes it’s just not possible.

    It’s pretty much a standard in every state now that if you drive off at the pump you’ll lose your license. Let the station owners actually prosecute the offenders instead of treating us all like criminals if we want to use cash.

    @NCN – As for the MoneyTP thing, I’ve started putting © notices in my feeds for just this reason. It hasn’t happened with my debt blog yet, but when I ran some others I had a problem with it as well and it’s a pain to deal with.

  9. I live in the beautiful MD Suburbs of DC so I doubt that the gas stations around here will go cash only — too many people. The lines would be huge! I get gas at Costco, most of the time, and they take NO cash and they’re gas is still cheaper than anyone else around. I guess they make it up on volume because there is almost always a line at the pumps.

    I can see where mom and pop gas stations want to shave costs but, as Robin (in the first comment), pointed out holdups and robberies leading to shootings will only multiply, especially in a large urban era.

    Hey maybe if we go back to cash, they’ll also come out and fill the tank for us and wash the windows and check the oil! (I’m showing my age, here).

  10. You do NOT want to even get me started on this subject. I live outside Detroit and I am a 21 year old female travelling alone the majority of the time. I do NOT want to carry $60 of cash on me every time I need to fill up, its unsafe and a ridiculous expectation. A lot of gas stations are charging outrageous amounts and not advertising it properly. One station said 3.99 on the sign outside, but when I put my debit card in and started filling up, it changed to 4.16… 3.99 was their cash price, but there was only a teeny tiny sign on the pump that said that (a sign you had to LOOK UP to see). I think there should be a government limit on what they can charge or IF they can charge these fees.

  11. I went to a Shell Station yesterday in Burbank, CA and they wouldn’t take my credit or debit cards! I simply went somewhere else! I don’t carry more then $10 around with me. Who does now days? We have been so programed to use plastic. My family and I are going out to Colorado soon and we will be taking extra cash along just for this reason.
    As if getting gas wasn’t a big enough pain, they’ve just added to the problem!

  12. I was recently in Pensacola, FL on vacation and noticed a lot of gas stations completely out of business or they were not selling gas anymore but just operating the convenience store business.

    It has not manifested itself like that here MN, but if things keep declining, it won’t be far off.

  13. In Clarksville, MD (outside the posh-er DC/Baltimore suburbs) there is a cash gas station. I believe it’s a “Freestate.” This one is off the beaten path & they don’t even advertise that you MUST pay in cash.
    I went inside to inquire & got about the rudest answer I’ve ever received in any retail transaction in my life just asking if they only took cash or if they would take a cc with the cashier. No signage anywhere.

    Hey gas station owners: Just tell us you must pay cash! Perhaps a sign?!!

  14. With two small children in tow I definitely would not fill up if there was a cash-only policy. I would send my husband. I can’t lug two children under two into the gas station to pay cash.

  15. I honestly expect all gas stations will either go to a cash-only or to a 2-tier pricing system within another few years. The credit card companies charge $0.10 per transaction plus a percentage that varies depending upon what the merchant has negotiated. I believe that the maximum is 5% (which at $4 a gallon is probably well above what most gas stations make in profit off the sale of their gas).

    It would seem logical that chain gas stations should get a lower rate, but apparently the major companies that franchise these stations do not include non-corporate stations in their agreements. This means if you are going to a franchise Exxon station (and Exxon has announced it is selling or converting all of it’s remaining corporate-owned stations to franchisees) they are paying a much higher rate than a corporate station, but you can rarely tell which is which.

    I also expect most gas stations to go with pay-first policies, at least after dark. While it would be nice if they could simply prosecute the drive-offs to recover what they lose, the fact is that far too many drive-offs simply cannot be prosecuted. The station sometimes doesn’t get a good picture of the license plate or the car is stolen (or has false plates). Sometimes it’s simply a matter of the local authorities not having the time and manpower to follow up until after the statute of limitations passes. Requiring pre-payment is much easier for the station, especially since it barely making a few cents per gallon off the gas to begin with.

  16. Wow… great minds think alike.. I just blogged about this topic yesterday! My local convenience store has announced they’re charging 75 cents to use your debit/credit card. I understand that gas prices are high and so are transaction fees… but if you’re running your business so close to the edge that you have to charge people a fee for a basic customer convenience, you’ve got other issues.
    Just a thought…

  17. Today I experienced getting yelled at by a gas station owner when I wanted to fill my tank using my debit card – $75.00! He was complaining of “the hit he will take” and how “the credit card companies are making him go broke.” The condition of the store (it was also what I would call an “inconvenience store”) wasn’t appealing, and I stopped there because the price of gas was lower than most other places. I suggested to him to get rid of credit card payments entirely, but he said that he couldn’t because everyone wants to pay with a cc, so he’d have no customers. Unfortunately, his rant was enough to make me not want to be a returning customer…I’m sure I am not the only person who only visited that station once.

    Also, concerning drive off prevention, I’m sure you’ll soon be seeing stations go back to having attendants fill your tank rather than be self-serve. It may be more cost efficient to pay someone to work the pumps and enforce pre-payments than to suffer losses from drive offs.

  18. I hear that MA won’t do it because they require service by manager. So they don’t want cash, they want a card they can stick into the machine. Honestly I’ve never had my gas pumped before, but what can you do? They only have pumped gas, I’ve never pumped since moving out here.

  19. I think that preventing the use of credit cards at gas stations is a BAD idea. Personally I use gas credit cards to save money, figure 5% back is like 20+cents off a gallon… we haven’t seen gas stations doing that here in Erie PA but if we do they will surely lose my business.

  20. If gas stations offered a cash discount, I would glady fork over cash. The liquor stores around here have a cash discount. I just found out one of my favorite take-out places has a 5% discount for cash, so I started paying with cash there.

  21. I know this is a no Credit Card blog, but when I get back 3% on gas on my card then I am saving ~$.12 per gallon by USING my credit card.

    Secondly, I believe that the debit transactions are MUCH cheaper for the retailer than CC transactions.

  22. “You would think that would be enough and they huge fees, treating credit card holders like people to be ripped off… wouldn’t be needed – but you would be wrong”

    “I think the fees are nuts, but then again Visa and Mastercard only ever look out for themselves and their profits.”

    I think what you don’t realize is that Visa and Mastercard’s only source of profits are the fees from businesses. Interest, late charges, etc. go to the banks that issue the cards not to Visa or Mastercard companies. Consequently banks carry risk of default, but Visa or Mastercard don’t care. Nor do they care if it is debit card used as a credit card or a credit card. Visa and Mastercard get their profit from businesses whenever Visa or Mastercard branded credit or debit (used as credit) card is used.

    I.e. when for example Citybank issues a Visa card, Citybank sets the interest rate, late fees, etc. Visa sets what they charge businesses. Then Citybank gets its income from customers whereas Visa gets its income from business fees. If a customer defaults – Citybank looses money, but Visa still gets its profits.

  23. Cash only is asking for trouble for consumer and store owner.

    Customers are at risk as crooks will know they have large sums of cash.
    Stores are at risk as crooks will know they have larger sums of cash on hand.

    Want to pay less fees to the credit card companies, go after them, no the consumer. As long as I can, I will NOT buy form gas stations that have different prices for cash and credit. I haven’t seen any cash only stations here, but they will be avoided as well.

  24. My local BP (So. Fla.) is giving a .05 discount if you pay with cash or pay with a BP credit card. But, the .65 I might save on a fill up isn’t worth it to me to go inside hand over cash, go outside and pump, go back in to get my change. And then I have change in my hand and I might end up buying a juice or coffee and the .65 I saved is no longer a savings.

  25. I think Sam has a point in there that would be very valid! He states that he “might end up buying a juice or coffee”. This would be a huge bonus for the stations as we all know that they have huge markup on these type of items. If forcing cash payments means ever a small percentage of people will buy more items inside they will come out well ahead I bet.

  26. I get 5% cash back on my credit card and I pay it off entirely every month so I am not going to want to stop that. If gas stations did change to cash only I probably wouldn’t shop there because I would have to take my two small children out of their carseats and bring them with me inside to pay. I would not even consider leaving them in the car while I pay. So this is too much of a hassle for me. I have been to a gas station before where their credit card pay at the pump wasn’t working and I drove off because of the inconvenience with young children.

  27. hello everyone, was reading your comments here, and it seems that gas station owners stopped accepting credit cards not because it was a rip-off for them, VISA and MC and the rest of the credit card networks did not change the percentage of what they charge, I think what happen is gas station owners just couldn’t live that so much money are going to these companies. Now when gas prices is back to normal no one seems to protest.

  28. Gas station owners are nothing but a bunch of rip-off artists that think they are owed everything on a silver platter!! Get over yourselves.
    It’s called business. If any of you gas station operators had an inkling of business sense, you would understand that credit cards are a business too. By making the consumer pay the penalty for your problem with credit card companies, I say too effing bad, live with it. If you can’t, go back to your native country dumb-asses!! We are tired of supporting you as__oles!
    It should be a crime in itself for you to send any of the money you make in the USA back to your foreign-ass country. Either be American or leave!

  29. Sam wrote “…And then I have change in my hand and I might end up buying a juice or coffee and the .65 I saved is no longer a savings.

    Philip wrote: “… If forcing cash payments means ever a small percentage of people will buy more items inside they will come out well ahead I bet.”

    No one is forced to pay cash; simply shop at a different gas station. Just as some other stores don’t accept credit cards, not all gas stations accept credit cards; just as most dry cleaners require payment in advance, some gas stations require payment in advance. Simply choose which station has the service and/or convenience you want and shop at that station. I mean I like Shell gas but I prefer to pay Freestate gas prices; for the life of me I can’t find a Freestate that sells Shell at the Freestate brand price.

    As for buying coffee or juice inside the store; well, don’t. I agree you might be tempted because YOU want a coffee or a juice, but you’re making, then, the decision to buy it. Do you always buy a pack of cigarettes, a lottery ticket, and a Slurpee everytime you go to 7-Eleven?

  30. I live in Los Angeles have never ran into a gas station that didn’t accept both credit and debit cards. Any gas station who would pull a stunt like that around here would quickly find themselves out of business.

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