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Just as it was recovering (sort of) from its PR nightmare, BP decided to slash rewards on its branded credit card, the BP Credit Card. The card, once considered among the best gas cards available, is now mediocre at best. 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 no longer a Nerd favorite.
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:
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.
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.
The best reason to not get the BP Credit Card: 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®’s signup bonus: Earn a $150 Bonus after you spend $500 on purchases in your first 3 months from account opening. Plus, it gives 5% rewards on rotating bonus categories as well as 1% elsewhere. Some years, gas is featured as a 5% category for two quarters, so you average 3% rewards on gas. That’s not to mention rewards on restaurants, select grocery stores and wholesale clubs.
If that doesn’t dissuade you from the old BP, take a look at the Blue Cash Preferred® Card from American Express. It gives 3% cash back on gas, plus 6% on groceries (up to $6k/year), 3% at select department stores and 1% elsewhere. It gives cash back, so there aren’t any silly minimum balance or one-time-fill-up gimmicks. There’s an annual fee of $95 ($75 if your application is received by 8/3/16), but spend $31 a week on groceries and it has already outstripped the BP Credit Card with room to spare.