Save on gas with these credit cards
Summer vacation means it's time to hit the road. But with gas prices around $4 a gallon, filling up your tank can dramatically reduce what's in your wallet.
Still, you can squeeze out a bit of savings by paying with a credit card instead of with cash or your debit card.
Many credit cards offer cash-back rewards that can shave a few cents off each gallon. Add that up over time, and that translates into significant savings.
Why credit over cash?
Card companies can offer you money back because they charge gas stations more for interchange fees -- what retailers must pay them to let customers use credit cards for purchases -- due to a higher risk of theft or abuse at gas stations.
If you’ve got a good credit score and payment history, you probably can get your pick of gas-rebate cards.
But picking the best gas credit card isn’t as simple as choosing the one with the highest rewards. Some things to consider:
- Is there a cap on gas rewards?
- Are there limits on where you can fill up?
- Is there a spending threshold you must meet before the full rewards rate kicks in?
- Is the cash-back rebate year-round for gas or only at certain times?
- Is the annual percentage rate an introductory offer that will increase after a certain period of time?
- How long will it take for the card issuer to give you your rebate?
Besides those factors, also consider how much you drive and where you fill up your gas tank.
If you use your car primarily to commute to work and fill it up at the corner gas station, you might consider getting a card specific to that company.
But if you’re a road warrior or fill up at the cheapest station regardless of brand, it’s better to go with a card that can be used most anywhere.
Best cards for local drivers
We generally warn against store credit cards, but if you regularly fill up at the gas station down the street, a credit card tied to a specific brand might be a good bet.
Just watch out for those interest rates.
The BP Visa (bp.com) pays out 5% bonus rewards on BP gas. For the first 60 days, your rewards are doubled to 10% -- which is great if you’re planning a long road trip.
Additionally, you'll get 2% rewards on travel and dining, and 1% on everything else.
There is no limit to the rewards you can earn, and you can claim your rebates in $25 increments.
You'll pay a variable 12.24% or 19.24% annual percentage rate (prime plus 8.99% or 15.99%), and there’s no annual fee.
If you fill up at ARCO gas stations, a BP affiliate in California, you’ll be charged 5% less per gallon if you pay with cash. And ARCO stations only accept debit/credit cards with a 45-cent fee. So it may not be worthwhile to use the BP credit card there if you can get gas for less by paying cash.
Three Citibank-branded cards also offer solid gas rewards.
CITGO stations offer the Citi CITGO MasterCard (www.citgo.com). The Phillips 66-Conoco-76 Platinum MasterCard (www.phillips66.com) works at Conoco, Phillips 66 and 76 stations. And the ExxonMobil MasterCard (www.exxon.com) can be used at Exxon and Mobil stations.
Both the CITGO and Phillips credit cards have similar terms: earn a 4% rebate by filling up with their stations’ gas.
You also get a rebate of up to 1% on nongas charges, although you have to charge at least $5,000 annually to qualify; otherwise you’ll get a half-percent rebate.
You can earn up to a maximum of $50 in gas rebates every month, and they’re automatically redeemed as a credit against future gas purchases made with the card.
The APR is high at a variable 19.99% to 23.99% APR (prime plus 16.74% to 20.74%). There is no annual fee.
The ExxonMobil MasterCard gives you 15 cents per gallon back on purchases made at Exxon and Mobil stations. For $4-a-gallon gas, that amounts to 3.75% off.
You also get 1% off of $6,000 in nongas charges, 2% off of charges totaling between $6,000 and $10,000, then back down to 1% on all charges over the $10,000 mark.
Rebates are automatically redeemed when you use your card, but they’re only credited in increments of $10 and expire after 24 monthly billing cycles.
The APR is a variable 19.99% to 23.99%, and there is no annual fee.
If you prefer to fill up at Costco, the TrueEarnings Card from Costco and American Express (www.americanexpress.com) gives you 3% cash back on Costco gas, as well as 3% rewards on restaurants, 2% on travel and 1% on everything else, including Costco purchases.
However, the 3% reward is limited to $3,000 in purchases per year; it pays 1% thereafter.
This card includes 0% introductory APR on all purchases for the first six months. After that, you'll pay a variable 15.24% (prime plus 11.99%).
There is no annual fee, but you must be a Costco member to apply.
Best cards for any-gas-will-do drivers
If the only card perk you want is gas rebates, the Visa Platinum Cashback Rewards Card from PenFed gives you the best rate on gas hands down, with a 5% rebate (1% on everything else).
There are no spending caps, minimums or annual fee required.
The APR is a variable 13.99% (prime plus 10.74%).
This is a tougher card than usual to get.
First, you’ll need excellent credit to qualify. Second, you must be a member of the Pentagon Federal Credit Union.
But even if you’re not employed at an eligible organization, you can still be a member by joining the National Military Family Association for $20. Once you are a PenFed member, you’re in for life. (Enroll at www.penfed.org.)
The American Express Blue Cash Preferred is ideal if you spend a lot on gas, groceries and clothes.
You get 3% rewards on gas and department store purchases, a whopping 6% on groceries, and 1% on everything else.
The $75 annual fee is quickly erased by these high rewards rates, and you get unlimited cash back with no spending limits.
You also get a $100 cash-back bonus if you charge $500 in eligible purchases in the first 60 days.
The introductory APR is 0% for the first six or 12 months, based on your credit score; after that, the APR ranges from a variable 17.24% to 21.24% (prime plus 13.99% to 17.99%).
If you want less hassle in getting a gas-rebate card, consider Capital One’s No Hassle Cash Rewards (www.capitalone.com).
It gives 2% cash back on gas purchases and 1% on everything else, with no annual fee or preset spending limits.
You can choose how you want your cash back either upon request, automatically at a set time every year or when a specific threshold, say, $25, $50 or $100 has been reached, but you need to contact Capital One to inform them beforehand.
Capital One is offering an intro APR of 0% until June 2012, then it will go up to a variable APR of 12.9% to 20.9% (prime plus 9.65% to 17.65%).
If you're still unsure about which credit card to pick, compare these deals with the best credit card offers in our extensive database.
Follow Interest.com on Twitter.