The following guest post was written by Michael, who is the founder of Credit Card Forum.
Near the end of 2010, the former President of Shell Oil predicted that U.S. gas prices could reach $5 per gallon by 2012. A lot of industry analysts are making similar predictions due to the economic recovery and surging demand from countries like China and India. But let’s not forget some of these same people were telling us in July of 2008 that gas would hit $7 the following year… obviously that never happened!
I don’t know which predictions will come true, but what I do know is that gas of around $3 (or higher) seems to be here to stay… or at least it looks that way for 2011. But whether it’s $2 or $5 per gallon, gas credit cards can be a great way to shave a little off the price. However not all of them are a good deal. Here are some things to consider when picking one out…
Station Specific vs. All Gas Stations?
Gas reward credit cards basically fall under two categories… those that only give rewards at an affiliated station (i.e. BP gas stations only) and those which are not affiliated with any specific brand of gas and give rewards at all stations. Both types have their pros and cons.
Obviously the benefit of a universal gas card is that you are not restricted to a specific brand of gas in order to earn rewards. This is especially helpful when you consider that the “name brand” stations usually cost more anyway. However, the downside is that they usually give a lower rebate (typically 3% or less) and there usually are caps on the amount of rewards you can earn.
On the other hand, a few gas station affiliated cards offer rewards of up to 5% on their gas, with no caps on the amount you can earn. If you usually buy that brand of gas, then it would probably be the way to go. But I would like to point out that the vast majority of station affiliated cards actually offer no rewards at all – most of them are not major credit cards and are geared towards with bad credit who can’t get approved for a normal credit card.
High Rebate Station-Specific Gas Credit Cards
Here are some that offer higher rebates at their affiliated stations. Please note that the rewards information was current as of January 2011 but of course it could change at any time:
Chase BP Visa
5% at BP gas stations, 2% on eligible dining and travel, 1% on other purchases, no annual fee, no caps on rewards
Sidenote: Many Americans don’t like the idea of giving BP their money right now (and understandably so!) but regardless of how you feel, there’s no denying this is a pretty darn attractive rewards program. I just wrote a review of the BP gas credit card a few weeks ago which goes over it in detail. I would also like to point out that this credit card is not on the advertising networks, so at the time of writing I’m not getting any kickbacks for promoting it – I just honestly feel the BP gas credit card has one of the better reward programs in this category.
Chase Marathon Platinum MasterCard
5% at Marathon stations, 1% on other purchases, no annual fee, no caps on rewards
Shell Platinum MasterCard
5% at Shell gas stations, 0.5% on other purchases, no annual fee, a maximum of $20 in rewards can be earned each month
Chevron Visa Card
10 cents/gallon on Chevron and Texaco gas (which equals a 3.33% rebate on $3 gas), 3% on non-fuel purchases at Chevron and Texaco, 1% everywhere else, a maximum of $300 in fuel credits can be earned per year
Phillips 66/Conoco 76 Platinum MasterCard
4% rebate at their stations, on other spending you get 0.5% on the first $5,000 spent each year and 1% on spending above that, no annual fee, a maximum of $50 can be earned each billing cycle
High Rebate Universal Gas Credit Cards
To be honest, the best gas credit cards in this category aren’t nearly as good as the ones previously available. During the years leading up to the gas price hysteria in 2008, there were a few gas credit cards that gave 5% at every station with no caps. Since 2008, many of them have reduced the rewards and implemented caps. Please note that my site Credit Card Forum does advertise most of the cards mentioned below, so to be transparent I just want to point out that there is a financial tie I have with them.
American Express Blue Cash
This is the only card on the market that still gives an unlimited 5% on gas (not to mention, grocery stores and drugstores) and 1.5% on other purchases. However you only get that after you spend $6,500 each year. Spending below that amount only earns you 1% on those 3 categories and 0.5% on everything else. There is no annual fee. Make sure you read a review of it before applying so you fully understand the details of the tiered reward system.
American Express TrueEarnings Costco card
If you are a Costco member this card has no annual fee. On the first $3,000 in fuel purchases each year it gives a 3% rebate. Other rewards include 3% at restaurants, 2% on travel, 1% everywhere else.
Discover More and Chase Freedom
I’m pairing these together because they operate in a very similar manner. Both give 5% on categories which typically rotate every quarter, up to whatever the quarterly cap may be. Unfortunately, there is usually only 5% at gas stations for one or two quarters out of the year on each card. However their 5% schedules don’t always overlap, hence if you don’t mind a wallet full of plastic you could strategically alternate between the Chase Freedom and the Discover More to possibly get the 5% on gas for a bigger chunk of the year (I have done this but it’s probably not worth the hassle for most people). Both the Chase Freedom and Discover More have no annual fee.
Capital One Cash Rewards
2% at gas stations and “major” grocery stores (I do not know exactly what’s considered “major”), 1% on other purchases, no annual fee, no rewards cap
This post was written by Michael, who is the founder of Credit Card Forum – a forum and blog for reviews of the best credit cards, as well as the worst.