If gas prices rise too high, more people will start using public transportation rather than get personal loans to fill up the tank. Image from Wikimedia Commons.

A new study suggests that if gas prices reach $4 per gallon, it could make drivers so desperate that they might start using public transportation. The national average for a gallon of gas is still below $4 per gallon, so until pain at the pump sends people headed for the bus station, there are still plenty of ways to save on gas in the meantime.

Americans may have a limit when it comes to gasoline

A new study purports that Americans may soon be pushed to a breaking point when it comes to gas prices, according to USA Today. The study, by the American Public Transportation Association, asserts that if the price of gas rises to a national average of $4 per gallon, public transportation systems will deliver an additional 670 million trips per year. In other words, people will only be able to tolerate gas prices to a certain point before turning to cheaper alternatives, as few will stand for having to take out personal loans to fill up their tanks. The APTA also asserts that ridership will rise with each dollar more per gallon, estimating that $5 per gallon will result in an additional 1.5 billion rider trips per year, and $6 per gallon will result in an additional 2.9 billion trips per year.

Public transportation can save money

Utilizing public transportation can save a lot of money, though many avoid it because of a perceived lack of convenience. The American Public Transportation Association projects that at a national average gas price of $3.47 per gallon, riding the bus can save a person $825 per month, and up to $9,904 per year. This figure includes savings on gasoline and on parking. The national average cost of a monthly parking pass is estimated by the APTA to be $161.56 for a parking space in a downtown business district, which is less than a bus pass would cost.

Gas costs can be gotten around

There are ways to circumvent rising gas prices,  if a person does not want to take out installment loans to buy a new hybrid, according to CNN. There are such things as gas station coupons, though they can be hard to locate and usually are only for one gas station. Warehouse clubs, such as Costco and Sam’s Club, offer gas discounts to members, and some gas station rewards cards can offer steep discounts off the cost of a gallon of gas. However, any savings from a gas station credit card can be effectively nullified by a high interest rate, so purchases should be paid off immediately before allowing interest to accrue.

Sources

USA Today

American Public Transportation Association

CNN

Sam's Club, the retail warehouse wing of Wal-Mart, will start offering online loans to businesses. Image from Wikimedia Commons.

Sam’s Club, a division of Wal-Mart, will start offering online loans through Superior Financial Group LLC. The loans will be for entrepreneurs to start small businesses. Superior Financial Group is one of the leading Small Business Administration loan lenders, and it has partnered up with Sam’s Club on a trial basis to expand services that extend to small business owners that are members of the warehouse retail wing of the Wal-Mart empire.

Wal-Mart finally into banking

Wal-Mart has been looking for a way to get into the banking game. In 2007, Congress blocked non-banking entities, including retailers, from opening banks of their own. According to the Wall Street Journal, Sam’s Club has been losing revenue but has decided to give this online loan pilot program a chance. The loans available to small business owners that are members with Sam’s Club will range from $5,000 to $25,000, and will carry a term of 10 years at 7.5 percent interest.

Trying to attract greater membership

Sam’s Club has not been performing well as of late. The chain of warehouse retail stores, akin to Costco, recently had to close 10 stores. Small business owners are a significant portion of their customer base, and a business loan program would serve to attract or retain small businesses as customers. Wal-Mart already offers check cashing and VISA Check Cards and has MoneyGram locations in many stores that offer financial services such as money orders, payday loans and cash advances.

Will this pan out for Wal-Mart?

The Sam’s Club online loans will only be a pilot program. The loans in this case will largely be geared towards women, minorities and start up companies, according to Business Week. If Sam’s Club can make a success of this program, it will definitely make it hard for small businesses to pass up a membership.

Further Reading

Wall Street Journal

Business Week