Just as it was recovering (sort of) from its PR nightmare, BP decided to slash rewards on its branded credit card, the BP Visa. The card, once considered among the best gas cards available, is now mediocre-bordering-on-sucks. Originally, it gave 5% back on BP gas, plus 2% on travel and dining and 1% elsewhere. The best part? It gave double rewards – that’s 10%, 4% and 2% – for the first 60 days. Now, well, not so much. It’s a veritable minefield of terms and conditions gotchas, and for all its nice looks, it’s a disaster of a rewards program (too soon?).
How far the mighty have fallen
Unwilling to have even one good thing associated with their brand, even if it’s just a credit card, BP sent out a mailer to cardholders announcing a change to its rewards structure. Effective March 3rd, the new “Pump Rewards” kick in:
- Earn 15 cents off per gallon per $100 spent at BP, up to 20 gallons
- Earn 5 cents off per gallon per $100 spent elsewhere, up to 20 gallons
- For the first 60 days after the account opens, earn 25 cents off per gallon per $100 spent anywhere if you’re a new cardholder, up to 20 gallons
You might be thinking to yourself, “25 cents off per gallon? That sounds downright good!” But wait for it…
BP to cardholders: read the terms and conditions, b****.
Let the fine print games begin! You can redeem your rewards in two ways: as a fuel rebate, and as a statement credit.
At-the-pump rebate: You accumulate rebates at a rate of 0.0015 per $1 spent at BP gas, which works out to 15 cents off per gallon once you’ve spent $100. You then choose to redeem your rewards at the pump. But when it comes time to actually use your credit, you’re hit by the fine print:
- You can’t bring the price of gas down to $0. So if gas cost $3 a gallon, you can’t spend $2,000 and earn enough of a rebate credit to get free gas.
- You can only apply the rebate to one fill-up. Since most of us don’t have 20-gallon tanks, this is a huge limiting factor. If you’re filling up a Prius, you just cut the value of your rewards by more than half.
- The rebate only applies to up to 20 gallons, so even if you did have an Army-grade vehicle that held 100 gallons, you’d still be limited to $3 in savings per $100 spent at BP.
So if you redeem for a rebate, the absolute best value you’d get is 3% on BP gas and 1% elsewhere, and 5% back on the first 60 days. Keep in mind that the 60-day perk is available only if you are a new cardholder – just switching rewards programs won’t cut it. But in all likelihood, your rewards rate will be a lot lower. If your tank holds only 10 gallons, your rewards rate is just 1.5%, 0.5% and 2.5%, respectively.
Statement credit rebate: If you go this route, you get a statement credit of $15 for every $1 you earn in rebates. This means that to earn a $1 credit, you’d have to spend:
- $44.44 on BP gas
- $133.33 everywhere else
- $26.66 during the promotional period
How do those rewards rates stack up? That’s
- 2.25% back on BP gas
- 0.75% back everywhere else
- 3.75% back during the promotional period
Sound terrible? The 3.75% back isn’t too bad…yet. Wait for it. Here comes the fine print:
Your statement credit does not apply to your minimum payment. This is how BP will screw you over.
Let’s imagine that you’ve accumulated a $15 statement credit, your minimum payment is $15 and your balance is $25. Theoretically, you should be on the hook for $10, because the $15 statement credit is applied to your $25 balance. Not so fast. BP requires you to pay $15, no matter if you have enough rewards that your effective balance is less than that. You’d have to spread your $15 statement credit over two billing periods, and if you should mistakenly send in a $10 payment, watch out for late payment fees, a penalty interest rate, and a slap to the credit score. Nice, BP. Very nice.
The best reason to not get the BP Visa: all the other options
At the end of all this, you might still be thinking that the 60-day promotional 5% rebate 3.75% statement credit is still worthwhile. Here’s why it isn’t. Let’s say you spend $1,000 in the first 60 days. Your signup bonus is worth $50 max if you use it as a gas rebate (remember: applicable to only one fill-up!) or $37.50 as a statement credit that’s just waiting to screw you over.
On the other hand, look at the Chase Freedom: $100 cash back as a signup bonus, and it gives 5% rewards on rotating bonus categories as well as 1% elsewhere. This year, gas is one of the lucky 5% for two quarters, so you average 3% rewards on gas. That’s not to mention rewards on groceries, eating out, hotel stays…
|Annual Fee||Signup Bonus||APR , Variable*||APR Promotions|
|$0||Earn a $100 Bonus after you spend $500 on purchases in your first 3 months from account opening||13.99% - 22.99% (Variable)||0% APR for 15 months on purchases and balance transfers|
If that doesn’t dissuade you from the old BP, take a look at the American Express Blue Cash:
The American Express Blue Cash gives 3% cash back on gas, plus 6% on groceries (up to $6k/year), 3% at department stores and 1% elsewhere, alongside a $100 signup bonus. It gives cash back, so there aren’t any silly minimum balance or one-time-fill-up gimmicks. There’s a $75 annual fee, but spend $25 a week on groceries and the Blue Cash has already outstripped the BP card with room to spare.
Verdict: The BP card sucks now. You can find any number of cards that will give better rewards, and won’t screw you over in the process.
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