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Best Way To Buy Gas – Gas Credit Cards or Discount Stations?

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Figuring out how you can score the cheapest gas can get complicated. To determine the optimal pairing of gas credit card and gas station, there are many things to consider. Some gas stations are cheaper than others, some gas credit cards don’t work at warehouse stores (like Sam’s or Costco), and some discount gas stations only take cash. On top of that, there are a whole host of gas credit cards with their own bonus amounts and limitations.

The real question is: What combination of gas credit card and gas station makes for the cheapest gas?

For purposes of this analysis, we took a snapshot of some gas stations in San Jose, California on Dec 8, 2010. However, the purpose of this exercise is to show you how to think about finding the best gas deal, not to point you in the direction of any particular combination of gas stations and gas credit card.  Run this same analysis in your own neighborhood and start putting that saved gas money to better use.

Gas Station Regular Unleaded, 12/8/2010 Price With 5% Rebate
(Blue Cash or PenFed Platinum CashBack)
Price With 3% Rebate
(Costco American Express)
Best Possible Price
Arco $3.19 N/A N/A $3.19
Costco $3.15 N/A $3.06 $3.06
76 $3.25 $3.09 $3.15 $3.09
Chevron $3.24 $3.08 $3.14 $3.08

On average, the most affordable gas stations in San Jose cost somewhere around $3.19 per gallon when we checked. The cheapest gas stations were $3.15 and the most expensive went as high as $3.39.

To find the best deal for gas, we compared four reasonably priced gas stations (Costco, Arco, 76 and Chevron) on price, and we included stations with both cash only and credit card options. Our average $3.19 finding applies whether you pay with gas, debit or credit cards, and we wanted to determine whether using a gas credit card would give you a better deal than using cash.

What we found is that most gas cards like Costco American Express, Amex Blue Cash, or PenFed Platinum CashBack give between 3-5% back in rebate. That’s something you won’t get paying with cash or your debit card, and it makes a big difference.

What’s the Best Deal?

In this study, we look at (i) ARCO discount gas stations that do not accept credit cards, (ii) gas stations at warehouse stores like Costco that do not qualify for bonuses on most gas credit cards, and (iii) normal gas stations like 76 and Chevron where you can get gas rebates with any gas credit card.

These three types of gas stations require different types of analysis. You have to compare the cash price of Arco against the Amex rebate-adjusted price at Costco, and against the 5% rebate-adjusted prices at 76 and Chevron. In this particular analysis, Costco comes out on top. The combination of Costco’s cheaper gas plus the 3% rebate from the TrueEarnings card beats out the other options.

In general, we think the findings of our study hold across most of America. You’ll spend the least amount if you can find a Costco nearby and fill up using a 3% rebate Costco card. But whether or not that’s worth the annual cost of a Costco membership and signing up for their American Express card, depends on your particular situation. In the case of San Jose, you’re almost as well off just sticking with the expensive gas stations and using a 5% rebate card.

We recommend that you run a similar analysis for your neighborhood and let us know what you find in the comments. You can easily find your neighborhood gas prices with gasbuddy.com, and you can find a selection of bonus rebates on our gas credit card page.

  • David Starr

    The article was missing one recommendation to save on gas, there is an outfit called MyGasDiscount.info,
    I joined them (it doesn’t cost anything to join) and then when I fill up, I keep the receipt and mail it in to get a
    50% rebate on the amount I spent for gas. However, there is an upper limit that you can do each month I
    think it is $200 or something like that — but believe me an extra couple of hundred bucks a month gives my
    family our weekly trip to the movies again… or you can always buy more gas.. LOL

    • http://www.nerdwallet.com NerdWallet

      Thanks for the note David, but unfortunately we can’t endorse this service. As you say, it’s free to join, but there is a $10 monthly fee after the first month. The website also doesn’t explain exactly how the refund policy works until after you’ve signed up for the service – typically a warning sign.

      It’s not clear to me how a service can give you money with nothing in return, so I would warn that this is almost definitely too good to be true.

      Plus it strikes me as odd that the site advertises itself as a “social network.” Something doesn’t smell right.

      • David Starr

        Hi NerdWallet,

        The website has the refund policy on the bottom of the opening page on the bottom (most place them there).

        I thought it was too true, so I joined as a trial member first, watched it work based on proof provided by the upline) and then I joined the program. Since then my club membership has already paid for itself.

        In all honesty, I am not sure “how” they are getting the money to pay us, I believe it has to do the gas company (where you bought the gas) corporate office pays the 50% as a customer acquisition cost or market research. I have not be deprived of an answer, I just haven’t asked … I just looked at all the positive feedback on YouTube from members.

        The social network I think is excellent! This allows members to communicate ideas, questions, concerns and compliments. The feature is like my “main” business of MPB Today (www.EatFree.US) which has been cranking out free $200 Walmart giftcards and the buzz on them is outrageously good.

        If you do decide to check out MPB Today, please join at http://www.EatFree.US as I am only one person away from “cycling” and getting my next Walmart card. :-) :-) :-D

        Thank you very much for the feedback. Feel free to ask any other questions too.

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