How Credit Cards Are Fueling Bigger Gas Savings

The best cards for gas earn at least 3X back at the pump, and they don't feature names of big oil companies or service station brands.

Gregory KarpSeptember 9, 2020

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If you’re paying full price at the gas pump these days, you might be missing a way to fuel your household savings. That’s because many rewards credit cards offer bonus points when you use them at the gas station.

Used right, those rewards are like a discount on every gallon you buy.

It’s not unusual now to get triple points — 3 points per dollar spent — for using a rewards card for service station fill-ups. And some of the best gas cards don’t feature the names of big oil companies or their service station brands. Instead, look for fat gas rewards on cards from retailers, warehouse clubs and credit unions.

Lucrative gas rewards are part of a larger trend in which intense competition among credit card issuers is driving better rewards for everyday spending, like gas, dining out and groceries, said Eric Marks, senior director with the banking practice of consultant West Monroe Partners.

“Payment providers and retailers now recognize they need these everyday spending rewards to attract and acquire customers,” he said.

Here’s what to know about gas rewards cards when examining your current credit cards or marketing pitches for new ones.

Use 3% back as a benchmark

The most lucrative cards offer the equivalent of 3% or more in rewards.

Example: With the Wells Fargo Propel American Express® card, gasoline is one of its 3-points-per-dollar bonus categories, along with dining, travel and eligible streaming services. Non-bonus-category spending earns 1 point per dollar. Its annual fee is $0.

Look beyond gas rewards

Look for credit cards that offer bonus rewards on not only gas but other areas of spending, too. Why? You might not spend as much on gas as you think. U.S. households spend an average of $1,977 per year on gasoline. Even with a 3% gas rewards card, that’s less than $60 per year or $5 per month.

Example: The Blue Cash Preferred® Card from American Express not only offers 3% back on transit and purchases at U.S. gas stations, it also offers a huge 6% back on purchases at U.S. supermarkets (on up to $6,000 per year in purchases, then 1%) and select U.S. streaming subscriptions. Terms apply. It has an annual fee of $95.

You might already have a suitable card

As more cards add gas spending as a bonus rewards category, you might find you already have a decent card for pump purchases.

Examples: The Citi® / AAdvantage® Platinum Select® World Elite™ Mastercard® earns 2 miles per dollar spent on gas, with an annual fee of $0 intro for the first year, then $99. The Hilton Honors American Express Surpass® Card earns 6 points per dollar at U.S. gas stations, with an annual fee of $95. Terms apply.

Mind the caps

Some cards place limits on how much gas spending will earn accelerated points or cash back.

Example: The $0-annual-fee Bank of America® Cash Rewards credit card earns 3% cash back in a category of your choice (gas is one of the options); 2% at grocery stores and wholesale clubs; and 1% on all other purchases. But the 3% and 2% rates apply only to the first $2,500 per quarter in combined choice category/grocery store/wholesale club spending.

Beware of ‘cents off’ rewards

Instead of a percentage of cash back or points per dollar spent, some cards — especially gas station-branded cards — give you a specific discount, such as 6 cents off per gallon. But when gas costs $3 per gallon, that 6 cents off is a mundane 2% discount. Plus, with gas station cards, you typically can earn rewards and spend them only at a single brand.

Rewards at the gas station vs. pump

Most cards that offer outsized rewards on gas spending include all purchases at the service station, including snacks or wiper fluid bought in the associated convenience store. But some cards limit rewards to gas spending paid at the pump.

Example: The PenFed Platinum Rewards Visa Signature® Card, with a $0 annual fee, offers a generous 5 points per dollar spent, among its rewards. But it’s on gas at the pump only.

Warehouse cards have pros and cons

The Sam's Club® Mastercard® offers 5% back on eligible gas purchases up to $6,000 per year, and the Costco Anywhere Visa® Card by Citi offers 4% back on eligible gas up to $7,000 per year. But you must be a member of those warehouse clubs, which means paying an annual membership fee. And redemption can be cumbersome.

All points are not created equal

Just because you’re earning 3 points per dollar spent doesn’t mean you’re getting the equivalent of 3% in rewards value. For example, the PenFed Platinum Rewards Visa Signature® Card gives 5 points per dollar spent on gas, but many redemption options are for a value of 0.85 cents per point instead of the more typical 1 cent.

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