How to use credit card at gas pump

For months on end, U.S. drivers have been struggling in the wake of rising gas costs. Throw in general inflation, and a lot of people are racking up higher credit card tabs to cover their essential expenses.

But now, filling up your car could result in an even higher credit card charge – albeit a temporary one.

If you generally don't come close to hitting your credit card limit, then a temporary hold – even a larger one – may not be a problem for you. But if you've been cutting it close lately, then you'll definitely need to start paying attention after swiping your credit card at the pump.

Here's what you need to know.

Don't panic if you see a large credit card charge

When you use a credit card to fill up your car, gas stations are allowed to place a hold on your card for a certain amount. The Wall Street Journal reports that Visa and Mastercard recently raised that hold limit to $175. That means even if you only fill up $60 worth of gas, you may see a much larger charge on your card temporarily.

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The good news is that you ultimately won't have to pay for more gas than you actually take from the pump. But the bad news is that the hold placed on your credit card for that larger amount could last several hours, or even several days. And that could prove problematic if you're nearing your spending limit and your billing cycle isn't over.

So, let's say a gas station puts a temporary $175 hold on your credit card when your tab only came to $75. Let's also say you have another couple of days left in your billing cycle and the $175 charge puts you at your spending limit. That means if you need to charge $125 worth of groceries that same day, you may not have the option. And so it's important to pay attention to temporary holds for gas fill-ups – even if that money is eventually refunded to you.

Does it pay to fill up your gas tank with a credit card?

Using a credit card at the pump has its benefits. For one thing, many credit cards offer cash back for gas fill-ups. That's a good way to offset higher gas costs.

But it's also worth noting that some gas stations offer a big discount on cash fill-ups. So you'll need to run the numbers to see if you come out ahead financially getting cash back on your credit card vs. paying a lower price per gallon from the start.

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Meanwhile, if you don't like the idea of seeing a large hold placed on your credit card for a fill-up, you can always ask a gas station employee to pre-authorize a smaller transaction (meaning, place a smaller hold on your card). But if you're in a hurry and need to fill up quickly, that's a time-consuming step you may not want to take.

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One of the main benefits of credit cards is convenience. Cards are particularly convenient at gas stations because in most cases, you can fill up right at the pump with your card, without having to go inside to see an attendant. Another advantage is that with credit cards, you have protection against fraud. This is important due to the rise of credit card skimmers being found at gas pumps.

Pull up to the Pump

When you are ready to buy gas, drive your car up to the terminal and make sure your gas tank is near the pump. Leave enough space so that you have room to pump your gas. If you need help remembering on which side of the car your gas tank is located, look at your dashboard. Many cars have a little gas indicator with a tiny arrow next to it. That arrow actually points to the gas tank side of your car.

Use Your Credit Card

Once at the pump, you'll usually have a choice of whether you want to pay with cash or credit. Select the "credit" button. Some pumps might also ask if you want to pay inside or outside, in which case you would select "outside."

Insert your credit card into the machine as indicated. Typically, you'll see a graphic indicating how to orient the magnetic strip on the back of your card when you put it into the machine. For most pumps, you'll be asked to insert your card and quickly remove it.

Some pumps may ask you to select the type of card you are using. Many pumps will ask you to enter your zip code to verify your identity. You may also be asked if you want a receipt at the end of your transaction.

Pump Your Gas

At most gas pumps, you'll have to choose the grade of gasoline you want. While a few pumps only offer regular gas, many also offer a mid-grade and premium gasoline as well. Some pumps also provide diesel as an option. Check with your car manufacturer as to which type you should put in your car, as some types may require premium or diesel.

Take the nozzle out of the pump and insert it into your gas tank. For some pumps, you may have to lift a lever on the pump to turn it on before pumping.

Collect the Receipt

After pumping your gas, return the nozzle to the pump. Seal your gas tank with the gas cap. You'll have the opportunity to request a receipt. It's a good idea to press "yes" and wait for the receipt to print. This way you'll be able to reconcile the amount with your credit card statement later, as well as have proof if there are any discrepancies.

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