I was curious after a couple of recent posts about gasoline cards. Going to the source of at least five of those cards, I checked out "The Associates" web page at www.theassociates.com. Here are a couple of interesting facts: (1) Associates dares to charge higher interest rates than almost anyone else. The Citgo, Shell, and Texaco cards bear 23.49% rates; the BP and Amoco cards are up to 24.49%. (2) All five cards offer cash advances, while Citgo and BP even offer convenience checks. Associates has made its gasoline cards almost identical to subprime bankcards, complete with cash advances, arbitration clauses, and high interest rates. All they lack is annual fees. My Shell and Texaco cards require only 3% of the balance as a minimum payment, which is identical to subprime cards like Providian and Capital One. (Most prime cards require only 2%.) With cash advances and low minimum payments, these cards are set up to create balances on which the high interest rates can be charged. Be careful out there!
Why would anyone pay 24% interest for gas bought and used last week? Carrying a balance on a gas card looks like a sure sign of financial distress.
Fuel Cards should absolutely be used for the pure convenience of being able to use their money for 30 days. Personally, I always pay off the balance each month. It's nice having one statement to keep track of fuel expenses as well. And my Diamond Shamrock pays me back .01 cent per gallon in rebate for using it each month. Dave is right, it is an APR trap if you carry balances, and these companies are notoriously brutal if you are late or miss payments. Peace, BarryN
RE: ASSOCIATES I guess this explains why the Associates is so agresive in sending out so many pre-approved offers for gas cards!
RE: ASSOCIATES You bet. For some reason, they sent me two preapproved offers within three months as I began to develop my credit record. I thought it was great and accepted both offers. With no annual fee, I had little to lose at the time. But now I'm planning on cancelling some of my subprime cards, so one of the Texaco cards will have to go pretty soon.
Associates are bottom-feeders taking advantage of the ignorant, in all of their many tentacles of financing. I recently helped my parents get a handle on their finances after an illness, and found out that my parents bought something for around 5K and used an Associates installment plan. They were told it was best for their credit if they made minimum payments, and refininced for cash occasionally. My parents aren't money savvy, but they have 50 years of spotless credit, and the people at Associates took complete advantage of their ignorance. They've made payments on this one item for 14 years. I figure Associates socked them for 12K or more in interest payments. I went into their office and paid them in full, they tried the same line on me, and I told their rep he was lucky I didn't knock his teeth out, and filed a report with BBB.
