On the way to pick up my daughter from her first day of school, I passed a gas station where regular was going for $2.77 a gallon. I made a mental note to get some gas there because that price seemed downright cheap.
But on my return trip home, I passed that same brand-name station -- just a half-hour later.
The price of regular gas: $2.89 a gallon.
A day later, the same station was charging $3.07 a gallon.
The nationwide average price of self-serve regular gasoline had already been setting record highs since the beginning of August, according to AAA. I understand that serious issues with the flow of fuel from the Gulf Coast because of Hurricane Katrina are cutting into the nation's refining capacity, but these nationwide hikes are still painful.
Within days after Katrina, gas prices had risen to just under $6 a gallon at some stations in the South.
What can you do to find some gas savings?
First, don't resort to long-term borrowing to buy your gas.
The overall increase in average annual gas prices from 2003 to 2004 (from $1.55 to $1.83 per gallon) led to a significant increase in the use of credit cards at the pump, with 54 percent of all gasoline customers paying with plastic in 2004, according to the National Association of Convenience Stores.
The huge increase in gasoline prices this year has accelerated that trend, and the NACS estimates that 70 percent of all motor fuels purchases are now paid with plastic.
I know the high price of gas may be draining your bank account. However, if you can't pay that charge off by the time your credit card statement comes due, you need to park your car, take public transportation, carpool or cut down on your driving. If you don't, your gas could end up costing a lot more than $4 a gallon.
For example, let's say you charge $70 a week of gas on your credit card, which carries an 18 percent interest rate. At the end of the month you've charged $280. But if you make only the minimum 3 percent payment on that debt (because money is tight -- that's why you charged the gas in the first place), it would take you 37 months to be rid of the debt. In that time, you will pay $85.88 in interest, according to a credit card calculator I used at http://www.bankrate.com/ .
