Tuesday, June 24, 2008

Gasoline & Credit Cards

Credit card fees are generally fixed at a little less than 2%. Many gas stations mark up their gas prices 11-12¢ per gallon over what they pay. Competition prevents a percentage markup. So when gasoline was $2 per gallon, credit card expense was approximately 4¢ per gallon. So using the 11¢ markup less the 4¢ credit card expense stations could make profit per gallon. Now that gasoline is nearing $4 per gallon the credit card expense goes up to 8¢ per gallon, which when subtracted from the 11¢ markup drops the profit per gallon to . Ouch! Wal-Mart is currently offering discounts to those using prepaid gift/store cards. We'll soon be seeing other gasoline retailers offering similar promotions to those paying cash.
See the Paper Or Plastic post.

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