New BP Credit Card Sucks. I’m Just Saying.

February 9th, 2012: The BP credit card rewards program just changed, much for the worse. For a full review on exactly why we think it’s a bad deal, check out our blog post covering the change.

Okay, so maybe their name is mud right now, but the BP credit card is still have a dark horse candidate for the best gas credit card. We’ve generally written off the card because it gives rewards only on BP gas, but the card now gives double rewards for the first 60 days. This means that, for two months, you get 10% back on BP gas, 4% on travel and dining, and 2% everywhere else for two months. That short-term boost actually lifts the BP credit card to the top of the list.

BP drills down and strikes travel rewards

The general BP rewards structure gives 5% on gas pumped at BP stations, 2% of purchases spent on “airlines, car rental agencies, lodging establishments, and dining establishments,” and doubles all of the rewards in the first 60 days. While most credit cards (like the Citi Shell) want you to book through their travel agencies to earn travel rewards, BP has no such requirement. It also places no restrictions on where you fly, whom you stay with or at which restaurant you eat. The rewards are paid out in $25 increments, and take the form of a check, gift cards or donations to the Conservation Fund, an environmental organization.

The comprehensive flight and hotel bonuses, then, make the BP credit card among the better travel rewards cards out there. Many airline- or hotel-specific cards earn extra rewards only if you book with them or their affiliates, while BP doles out its rewards impartially. Oddly enough, even though the card is restrictive in the sense that it gives 5% rewards only on BP gas, it’s pretty generous with flights and hotel stays.

Among the few restrictions: no 2% rewards on fast food (a $0.01 loss for every Dollar Menu purchase) and no extra rewards on superstores, warehouse clubs, or discount stores (fairly standard, though most people usually don’t book flights at Costco. BP gas rewards are also limited to the first $500 spent on gas a month, which works out to $50 in the first 60 days and $25 thereafter. However, it’s not that restrictive of a cap, since you’d have to buy 118 gallons of gas a month (at $4.25 a gallon) to reach it. Not among the restrictions: total rewards caps. You can earn unlimited rewards on purchases other than BP gas.

Terms, conditions, and the BP Card

The APR on the BP credit card is actually reasonable: 15.24%-19.24%, variable, which easily beats out the Shell credit card’s 24.99%. There’s no annual fee, and the cash advance policy is among the better ones for retail cards. The cash advance fee is 3%, down from industry-standard 4% or 5%, and the APR is 19.24%-23.24%, compared to 24.24%. All in all, fairly reasonable terms. The BP Card, on the other hand, isn’t that great. It only earns rewards on Amoco Ultimate, its premium fuel, which basically negates any savings you’d get.

BP vs. PenFed Platinum Rewards and AAA Visa

How does the BP card stack up against the other top-notch gas credit card? Pretty darn well, even if your gas spending is heavily weighted toward non-BP gas. The PenFed Platinum Rewards Cashback Visa pays 5% on all gas, plus 1% elsewhere. Still, even though it’s more versatile, BP’s savings win out in the end.

Here, we made a few assumptions. We figured that our hypothetical consumer spends $400 a month on dining and travel, used 45 gallons of gas a month at $4.25 a gallon, pays $4.50 a month for a AAA membership and charges $1,500 to his card for other expenses. Next, we broke down the rewards based on how much gas he filled at BP as opposed to other stations.

Gas distribution: 10% at BP, 90% elsewhere:

Rewards	3 Months	6 Months	12 Months
BP	$123.65	$195.79	$340.06
PenFed	$85.82	$171.64	$343.29
Verdict	BP	BP	PenFed

Gas Distribution: 50% at BP, 50% elsewhere:

Rewards	3 Months	6 Months	12 Months
BP	141.04	224.5225	391.48
PenFed	85.8225	171.645	343.29
Verdict	BP	BP	BP

Gas Distribution: 90% at BP, 10% elsewhere:

Rewards	3 Months	6 Months	12 Months
BP	$158.64	$253.5925	$443.5
PenFed	$85.8225	$171.645	$343.29
Verdict	BP	BP	BP

Even when you spend 90% of your gas budget at non-BP stations, the extra rewards on travel and dining, plus the initial 2x rewards boost, help the BP credit card to come out on top of the PenFed Platinum Rewards almost every time.