You can actually save less money with a credit card from a gas company than with a generic cash-back card. This is why.
Research Make (such as Cadillac) Update, August 21, 2022, by Penelope Wang: Regular gasoline now costs $3.90 on average across the US, down 5 cents from the $3.95 listed below.
Is acquiring a gas-branded credit card worth it given the high cost of gas—the national average price for a gallon of ordinary gas as of August 16, 2022, is $3.95—to save some money?
It sounds very alluring. Typically, gas credit cards like those provided by Shell or ExxonMobil offer 5 to 10 cents off per gallon of fuel. Therefore, adding fuel to a 15-gallon tank might reduce the cost by as much as $1.50.
However, regular cash-back credit cards may allow you to save much more. A savings of $2.96 on a 15-gallon fill-up ($59.25) with a rewards card that offers 5% on fuel purchases would be approximately twice as much as the gas card.
Not only that. You actually receive less of a benefit when gas prices rise since the repayment amount on gas credit cards is paid back in pennies rather than as a percentage of the total.
Gas card discounts become less valuable when gas costs are high, according to Ted Rossman, senior industry analyst at CreditCards.com.
Consumers have been surprised by the sudden increase in gas prices since they had grown accustomed to the pandemic’s comparatively low prices.
GasBuddy, a website and mobile app that aids drivers in finding the best discounts, has seen the quickest seven-day increase in gas prices ever. According to Patrick De Haan, head of petroleum analysis at GasBuddy, “those higher costs are likely to linger for months.”
Here is a closer look at the credit cards that provide you the most value if you’re seeking for strategies to offset rising inflation, especially while filling up your automobile.
Card for general rewards
According to Rossman, rewards credit cards that offer 5% cash-back savings on gas purchases offer the most significant gas discounts.
There are choices available without yearly fees. Make sure you are aware of the restrictions on the savings.
For instance, the Citi Custom Cash Card offers cardholders up to $500 in cash back on their top expenditure category, which may include gas, each billing cycle. The cash back rate for all other purchases is 1%.
Sam’s Club and Costco provide credit cards that pay substantial cash back on gas purchases, which may be done at any gas station, for individuals who feel it worthwhile to purchase a warehouse club membership.
Sam’s Club MasterCard offers cash back at a rate of 5% up to an annual ceiling of $6,000 and 1% after that. Up to $7,000 per year, the Citi Costco Anywhere Visa Card offers 4% cash back on gas expenditures; beyond that, it reduces to 1%.
If you drive a lot and anticipate hitting a points cap, Rossman advises using one card solely for gas expenditures and another for other types of transactions.
The PenFed Platinum Rewards Visa Signature Card is an additional choice; it offers unlimited miles rewards and five times the points on gas and electric car charging. These points can be applied to a variety of purchases, including gift cards, retail, and travel.
The PenFed Credit Union, which accepts new members with a $5 deposit, offers the card. However, in order to be eligible for the maximum gas benefits, you must be an Honors Advantage member, which calls for being in the military or opening a PenFed bank account.
Check out websites like CreditCards.com, WalletHub.com, and MoneyCrashers.com to compare various credit card benefits.
Credit Card for Gas
According to Bill Hardekopf, senior analyst at Moneycrashers.com, rewards cards may give larger savings, but if you don’t have strong or excellent credit, it might be simpler to get approved for a gas card because you can frequently do so with a fair credit score.
Most gas cards don’t have annual fees, but if you rack up a balance, you’ll probably be hit with high interest rates. For instance, Shell charges an APR of 28.74 percent rather than the 17.98 percent average APR for credit cards nationwide.
Gas card discounts are minor, as was already mentioned. Say you spend $138.25 a month on 35 gallons of standard gas at a cost of $3.95 per gallon. If your credit card offers a 5-cent reward rate, you would receive $1.75 in return, translating to a 1.27 percent cash-back rate.
The maximum number of gallons that can be purchased with the discount may also come into play. Additionally, your discounts often only apply to the brand of the gas company.
However, some cards also come with extra perks, like savings on non-fuel expenditures or cash back on other types of transactions.
Hardekopf names the BP Credit Card as one of the best options, offering a 1 percent discount on non-fuel purchases at eligible BP and Amoco stations in addition to a 5 cent per gallon discount on gasoline. Another variation, the BP Visa Credit Card, offers a 10 cent per gallon discount in addition to a 3 percent grocery discount and a 1 percent discount on all other transactions.
If you participate in their loyalty programs and make purchases using a mobile payment app like Apple Pay or Google Pay, several gas retailers will also give you discounts.
Build Up Your Benefits
Try to combine your discounts with other loyalty programs wherever you can to maximize your savings.
Many gas companies have their own applications that don’t need a credit card with the gas company’s name but provide a few cents off per gallon on a transaction. Instead, you can pay for those expenses using your rewards credit card.
You may combine both savings by attaching a credit card that offers petrol rewards, according to Rossman, who also employs this tactic.
For instance, you might utilize the Phillips 66 app to combine a Sam’s Club Mastercard that offers 5 percent cash back on gas with a recent 10 cent per gallon discount.
Every little bit helps when attempting to combat inflation, whether it is at the gas pump or elsewhere.
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