I know that to some extent these things existed last year as well, but I also know that people adopt things in stages (cutting edge, early adopters, mass adopters, and finally the old folks).

That's true, but this strikes me as a big change in which to suggest it all due to ease of use and rewards benefits. Sorry, I'm still going with the defer explanation until I get some more information/data.

The haazards of not paying off your credit card bills are, of course, as you suggest.

And, of course, since I get frequent flyer miles for every $1 I charge and always pay on time I have an incentive to use the plastic and few disincentives.

Typically you try to be Mr. Empirical, which I applaud. As such, to be able to determine whether the shift in question measures what you think it measures you need more than two data points Further, you need to see what the general trends are in terms of credit card usage. Further, the prevalance of pay at the pump capability and other factors need to be established.

I don't doubt that some of the shift is the result of increased gas prices--but also, gas prices were near two dollars last year, so it isn't as if this is the first year of high gas prices--indeed, the most recent jump to 2.50ish is from the last month or so, which likley is a timeframe not captured by the study.

Hence, I think your update is a tad defensive.

There's a discussion going on at Outside The Beltway about this report that the use of credit cards for gasoline purchases has increased significantly in the last year.

Think about it, at $3 per gallon, I get a $0.15 per gallon price break. Why would I use anything else? I’m sure that at least some of the people out there are doing the same thing.

If you can pay cash and get a price below $2.85/gallon then you are losing out. If the gas would cost you $2.85/gallon then you should be indifferent, and anything over $2.85/gallon you should use the card. Leslie on the other hand gets the 5% back and pays the balance off so that is like getting a 5% discount.

Uh, Steve, I assume you’ve heard of the 25-day grace period on new purchases (a feature of even the most craptacular credit card)? Time your purchase right and you get a 50-60 day interest-free loan.

Okay, so you have 50 to 60 days, this doesn't change the point of my post at all. Note the part where I write, "if the balance is not paid off right away due to interest, finance charges, etc."? The point still stands that if you carry those balances forward past that date you end up paying more for the gasoline.

That and I don’t think people these days are hauling around $30-50 in cash so they can plunk it down when they fill up.

Again, I don't see this undermines my point. I'll restate it once again,

The article rightly notes that gasoline that costs $2.60/gallon can easily morph into $3/gallon if the balance is not paid off right away due to interest, finance charges, etc. So unless you expect to see some significant drops in the price of oil in the near future this might not be the best strategy for dealing with the higher gasoline prices.

So if you payoff your balances and get a percentage bonus on purchases then it made sense to use the credit card before the price increase as well as after. This explanation is not likely going to explain the fairly big increase in credit card usage.

Maybe it is because credit cards are offering discounts for buying gas and groceries now.

Unless this is a new policy it doesn't offer much in the way of an explanation.

A LOT of stores that previously allowed people to pump gas first and pay after they finished pumping are now instituting “hard” pre-pay policies, which is a pain in the butt if you’re filling up the tank.

Yes, and if you don't pay off that balance then you are going to be paying $3/gallon vs. $2.60 or whatever the price is where you buy gasoline. If you fill up a 20 gallon tank this is a differential of $8/tank of gas. You sure do put a very high premium on your time. It takes what maybe 5 minutes at most to pay cash, so this implies a $96/hour reservation wage.

Sorry if this has already been said.

That and I don't think people these days are hauling around $30-50 in cash so they can plunk it down when they fill up.

A LOT of stores that previously allowed people to pump gas first and pay after they finished pumping are now instituting "hard" pre-pay policies, which is a pain in the butt if you're filling up the tank.

I use plastic just to avoid having to deal with that hassle, even if I have the money in my pocket. And I'll bet a lot of others do so as well.