Can Prepaid Gas from MyGallons.com Save You Money?
July 1, 2008 by Miranda Marquit
Filed under Economy, Family finances, News, Personal Finance, Trends
A couple of years ago, when we were worried that gas might (gasp!) reach more than $2.50 a gallon, there was talk about prepaying for gas through a card, or for buying gas through such organizations as Gas Bank.
Back then, we though it would be the height of ridiculousness if gas prices cracked the $3.00 mark. Now we have sort of resigned ourselves to that fact that by this time next year we could very well see $5.00 a gallon gas.
So it’s no surprise that prepaid gas is getting some buzz again. This time you can buy gas at today’s prices through MyGallons.com, and hedge against future rises to gas prices. Here’s how it works:
- You go online and set up an account.
- You buy a set amount of gallons of gas.
- MyGallons.com sends you a card that supposedly works at 95% of the nation’s gas stations.
- You swipe the card and fill up, using the gallons in your account.
Now, of course, there are fees. That’s how companies make money. Here are the fees that you can expect to pay when you use MyGallons.com:
- $29.95 annual fee for an automatic refill plan that automatically adds gallons to your account (and charges you) when your balance gets below a certain point.
- $39.95 for a plan that allows you to replenish your account on your own.
- $15 overdraft fee if you get more gallons than your card has left on it. (You can get reminders for when your account falls below 15 gallons.)
- $1.95 reload fee when you use your card to add more gallons.
Whether it’s worth it depends on how much you drive, and whether you buy a lot of gas right now. And, of course, whether gas prices continue to rise. The idea is to buy now, and then keep buying gas regularly, until the prices move high enough that the difference makes it worth it to start using your prepaid gas card.
There’s a handy calculator on the Web site that tells me that I could save nearly $400 if I bought all my gas right now, and if prices kept heading up at the current rate. If that were truly the case, then the yearly fee would be worth it. Maybe.
MyGallons claims that you can get a refund. Well sort of. You get refunded the current MyGallons price, or what you paid, whichever is less. So if gas goes down, and you decide on a refund, you lose money. If gas goes down, MyGallons obviously won’t guarantee you anything. Instead, you’re just supposed to hold on to your account and wait for gas prices to rise again.
But, of course, this is a form of speculation. Will gas prices really continue to rise dramatically? What if (long shot, I know) gas prices actually fall? What happens if MyGallons fails and you have 50 gallons in your account?
I think that, for now, I’ll stick with the discount I get on gas when I buy groceries.
Do you think that prepaid gas from MyGallons.com is a good deal?
image credit: sxc.hu
You know me, always skeptical. I worry that the card won’t be “good” when I want to use it or that the gas stations I want to use won’t accept it. Or, you know, that it’s just a big scam.
Just call me Pollyanna!
My worry is that gas prices will suddenly stop rising, and move at a slower pace, making it so that it takes a very loooooong time to make it worth using the card.
speculators in gas cards that’s interesting. I found it interesting that you get a discount on fuel for when you buy groceries. How does that work. Donna
The local grocery store has an agreement with a gas station in town (that happens to have pumps in the parking lot a la Sam’s Club) that when you spend a certain amount, you get a per-gallon discount. Like when you spend $30-$75 you get 5 cents off per gallon, and it goes up to 35 cents a gallon if you spend more than $350. My last grocery bill got me 15 cents off per gallon, which isn’t bad. We just buy groceries like normal, and then collect a discount on gas.
Does anyone do homework anymore before writing or publishing a story? Looks like the answer is NO.
Here are the problems I see with mygallons.com site.
They state:
2000 members
Soft Launch in January
Problems:
Registered Domain in March
Registered company in April
Got SSL Certificate 2 weeks ago (Not possible to run credit cards without it)
Have testimonials on their site (Not possible since no site, no members and it takes 1-6 weeks to get card)
Site went live last week
Now Voyager, the supposed back end that runs the mygallons site says they have no business relationship with the company and the Voyager locater has been removed from the mygallons.com website, plus they have changed their details and have removed the Voyager details from there site, although for some reason, there are still some Voyager logo’s still on the site but my guess is that they will be removed sometime today.
Conclusion:
Not too good. Can you say “SCAM”? They are not being honest and truthful. Make your own conclusion. Do I feel safe sending them my hard earned dollars, absolutely NOT
As you can see, what was written wasn’t overly favorable. I’m not sure that I’d call it a scam, but it definitely is speculation, and may not be the best idea.
Driving less, and supporting initiatives to move us away from gasoline altogether are much better options.
This is exactly the sort of speculation that drives gas prices higher. When people horde gas, demand goes up.
You make an excellent point. Indeed, speculation appears to be paying its part in oil and gas prices as people rush to speculate on its increasing prices. As a result, prices increase. It’s a rather vicious cycle.
Read the comments on the LA Times Blog. Looks like all of the details and an in depth investigation took place and details are posted in link below. The outlook for mygallons isn’t looking to good. Looks like a scam.
http://travel.latimes.com/daily-deal-blog/index.php/mygallonscom-july-1–2146/
Thank you for sharing this link! Looks like, as always, it is best to get as much as information as possible before committing hard earned cash to anything.
it’s funny how when a new idea comes out all you negative thinking people come out from under the rock from where you live your pathetic lives and share your opinion.
Let entrepreneurs be entrepreneurs and get back to your 9-5 dead end jobs.
No one’s saying that they can’t be entrepreneurs. But there are plenty of people saying that you should be careful with your money — and wait to see if something works for your situation.
The Consumerist just posted this about MyGallons and the BBB!
http://consumerist.com/tag/mygallons/?i=5022061&t=bbb-says-mygallonscom-omitted-fact-in-advertising-has-no-contract-to-process-transactions
Sorry about the insanely long link. Hope you can fix that.
Thanks, Jen! I’m not worried about the long link.
And the clerk said: “our card/phone system is down”