Credit Cards Offer Some Relief from Gas Prices

March 6, 2012, Written By Lynn Oldshue

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Gas prices jumped 8% in February and could reach record highs by summer. Gas at $4 or more per gallon drains additional money from budgets at a time when money is already tight for many households. Credit cards with gas rewards can provide consumers with a small bit of relief.

As you compare cards, pay attention to the fine print because rewards on gas credit cards can be confusing with complicated terms and conditions. In addition, they can be more expensive than standard credit cards due to higher APRs.

Unlike other reward cards, some gas reward cards aren’t as generous as they were a year ago. The rates and rewards for some cards have changed over the past year so pay attention to the notices you receive about your gas card.

Credit cards offering rebates on gasoline are offered from two sources: gasoline companies and credit card companies. These cards use cash back, gift card or fuel credit incentive programs that are based the amount of purchases you make.

When deciding on a gas card, one consideration should be your purchase pattern. If you consistently purchase gas from one particular station near your home or office, you may want to consider a credit card offered by that brand. However, if you fill up at different stations or look for the least expensive gas, a bank-sponsored card is probably more appropriate for you since those rewards are consistent no matter where the gas is purchased.

Like all reward cards, the benefits are a good deal only if you pay off your entire balance on time each month. Otherwise, the interest rates incurred on the monthly balance can be very costly. Many station-branded gas cards have some of the highest interest rates in the industry, ranging from 21% to 26.99%.

Gasoline Company Credit Cards
Credit cards issued by specific gas companies like BP/Amoco, Shell, and Texaco offer some attractive discounts for gas purchased from their stations. However, these cards typically have a much higher APR than bank-issued cards. Pay attention to the details of the offer because some companies give attractive incentives for the first few months, then change to a much lower rebate. In addition, some rewards have a limit on the amount of rebates you can earn. Offers vary by card so read the fine print to see if the incentive is cash back or fuel credits. Some companies will credit your account monthly, while others may only redeem annually.

These cards offer some of the biggest savings to loyal customers who usually buy gas from one brand:

Shell Platinum MasterCard
The Shell card once offered a straightforward 5% rebate on Shell gas purchases. It now ties your gas discount to your credit card usage. Make qualifying purchases of $500 or more in a billing cycle and you will earn a credit of 10 cents per gallon on the first 100 gallons of Shell gasoline; $1,000-$2,499 earns a credit of 15 cents per gallon; more than $2,500 earns 20 cents per gallon. The credit will only apply to the first 100 gallons of Shell fuel purchased with your Shell Platinum Select MasterCard in that billing cycle. It should be noted that Shell provides a maximum rebate per billing cycle of $20 ($240 per year). The APR for the Shell Platinum Select MasterCard is 23.99%.

Exxon/Mobil MasterCard
The fuel credit is 15 cents per gallon at Exxon/Mobil gas stations. Each year, earn up to a 2% rebate on your first $10,000 spent on other eligible purchases, and 1% on other eligible purchases over $10,000. The rebates are automatically credited to your card in $10 increments. You must make at least $10 in Exxon and/or Mobil gas purchases in a single billing cycle to redeem your rebates. The rebates are for future gasoline purchases at Exxon/Mobil stations. The APR is 19.99% for the Exxon/Mobil Platinum MasterCard and 24.99% for the Exxon/Mobil Classic MasterCard

Chevron/Texaco Credit Card
Earn 10 cents per gallon for the first 60 days from the date the account is opened on up to 200 gallons per billing cycle period of Chevron and Texaco. After the intro period, earn 10 cents per gallon and 3% fuel credits for non-gas purchases at Texaco/Chevron locations. In addition, you will receive 1% fuel credits for all non-fuel purchases. Chevron/Texaco has a maximum $300 annual fuel credit limit. These fuel credits are applied to future purchases of gasoline at Chevron/Texaco locations only. The APR for the Chevron and Texaco credit cards is 26.99%.

Gasoline Rewards from Credit Card Companies
Gasoline rewards from cards issued by credit card companies usually offer a wider range of benefits. These cards don’t require purchases at a specific gas station, and give cash back on purchases other than gasoline. But some cards have confusing terms and conditions which need to be understood before applying for the card.

Some cards offer rotating programs that give higher gas rewards during a specific time of the year. The rewards rotate by quarter and enrollment may not be automatic. Some of these programs require you to sign up each quarter to receive the rewards, making various rotating rewards programs harder to navigate.

A number of programs have a maximum benefit amount that you can earn per billing cycle. They may also have purchasing tiers, and full benefits may not begin until you reach the designated spending limit; rewards are smaller until you reach the tier.

Most cards advertise that rewards don’t expire, but rewards can be forfeited for late payments, inactive accounts or closed accounts.

Chase Freedom Visa Card
This card advertises a 5% cash back reward for certain categories of purchases each quarter but this is limited to $1,500 in purchases each quarter–a quarterly maximum cash back reward of $75 in these special categories. Consumers can earn 5% on gas purchases during the first and third quarters of 2012. The card also gives 1% cash back on all other purchases with no limit on the amount earned. New customers can earn a $200 cash back bonus after spending $500 during the first three months. The APR is 15.99% to 22.99%

 

Discover Card Open Road
You receive a 2% reward on the first $250 of all eligible gasoline and restaurant purchases each billing period, or a maximum of $5. Discover also sets a spending tier on earning cash back on other purchases. Consumers earn 0.25% for all other purchases until you spend a total of $3,000. Then, you earn a 1% reward on all other purchases. You can redeem awards in $20 increments. There is no limit on the amount of cash rewards earned with this card, and there is no annual fee. New cardholders receive a free $150 Restaurant.com gift certificate after the first purchase. The APR is 10.99% to 19.99%.

Citi Thank You Preferred Card
Earn five ThankYou Points for every $1 spent on all purchases at stand-alone gas stations, supermarkets and drugstores during the first 12 months and one point for every $1 spent thereafter. New customers can earn 15,000 points after spending $1,000 within the first 3 months. Earn an anniversary bonus of up to 3% of ThankYou points earned during that previous membership year. Redeem points for cash, travel rewards, or gift cards. The APR is 12.99% to 22.99%.

True Earnings Card from Costco and American Express
True Earnings offers cash back awards of 3% for purchases of gasoline up to $3,000, and 1% on subsequent purchases. Cardholders also earn 3% cash back on restaurant purchases, 2% on travel-related purchases and 1% on all other transactions. The card only allows redemptions on an annual basis that is an in-store coupon redeemable for merchandise or cash at Costco only. There is no limit on the amount one can earn and no annual card fee for Costco members. The APR is 15.24%.


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The information contained within this article was accurate as of March 6, 2012. For up-to-date
information on any of the terms, cards or offers mentioned above, visit the issuer's website.