With today’s gas prices, it’s even more important to manage your expenses. The rising cost of groceries is made worse by the rising cost of driving to the grocery store. And as road trip season approaches, vacationers are going to need to budget a lot more for filling up their gas tanks.
According to AAA, the average price of regular gas per gallon is $3.53. You might have considered getting a gas-company credit card to save some money at the pump. After all, getting 10 cents off on each gallon sounds like a good deal. But is it the best you can do?
Photo: Deposit Photos
Many gas companies offer a brand-specific credit card that will help you save money, but you may earn more by using a credit card that offers rewards on gas as well as other purchases.
Doing the math
Gas credit cards want brand loyalty, offering an average of 5 to 10 cents off every gallon of gas you pump. That sounds great; if I fill up my 16-gallon tank, I would save 80 cents to $1.60 per tank using a gas credit card. If I fill up twice per month, I could save up to $38.40 annually. But if I use a credit card with a cash-back option, I might save more.
Let’s consider that same 16-gallon tank of gas at $3.35 per gallon. By using a credit card offering a promotional rate of 5% back on gasoline purchases, I would save $2.68 on a tank of gas. That is at least $1 more in savings per tank than if I use a brand-specific card that offers a per-gallon reward. And if gas prices continue to rise, my savings per tank is reduced if I use a card based on a set discount per gallon instead of a percentage.
We looked at a number of rewards credit cards that offer cash-back savings on gasoline purchases. These offers are available at the time of this original post. But remember, any credit card offer may change without notice. Read the fine print on the offer before applying.
Which credit card is best for you?
Photo: Deposit Photos
Here are a few credit cards with bonus offers for gasoline purchases. Be aware, though, that opening or even just applying for a new credit card account can hurt your credit score in the short term. Also, most of the cards below have no annual fee, but you might find that some cards that charge fees pay for themselves, depending on your spending pattern.
American Express Blue Cash Preferred
Point rewards or cash back: Cash back in the form of reward dollars that can be redeemed as a statement credit.
Offer: A Living on the Cheap editor loves this card because of the combination of 3% cash back at U.S. gas stations and 6% cash back at U.S. supermarkets. (The supermarket savings apply up to $6,000 per year in purchases, then drop to 1%.) Card holders also get 6% cash back on select U.S. streaming subscriptions. She says her cash back refunds in just those categories more than pay for the annual fee.
Annual fee: $0 introductory annual fee for the first year, then $95
Bank of America Customized Cash Reward Credit Card
Point rewards or cash back: Cash back
Offer: Choose among categories including gasoline purchases for a 3% cash-back reward. There is a cap of $2,500 on purchases in a combination of the 3% category and the 2% you can earn on purchases at grocery stores and wholesale clubs. After you reach the cap, you will receive 1% back on those purchases.
Annual fee: None
Citi Premier Credit Card
Point rewards or cash back: Points
Offer: Earn 3 times the number of Thank You Points at gas stations, restaurants, grocery stores, air travel and hotels. You can redeem points for gift cards and on purchases at retailers including Amazon.
Annual fee: $95
Citi Rewards+ Card
Point rewards or cash back: Points
Offer: Rewards automatically round up to the nearest 10 points on every purchase. Earn double ThankYou Points at gas stations and supermarkets for the first $6,000 per year.
Annual fee: None
Costco Anywhere Visa Credit Card by Citi
Point rewards or cash back: Cash back in the form of a reward certificate redeemable at Costco for cash or merchandise
Offer: Earn 4% cash back on eligible gas and electric vehicle charging for the first $7,000 per year. (You will only earn 1% cash back, not 4%, for gas purchased at superstores, supermarkets, convenience stores and warehouse clubs other than Costco or for fuel used for non-automobile purposes.)
Annual fee: None, as long as you have already paid for your annual Costco membership (starts at $60).
PenFed Platinum Rewards Visa Signature Card
Point rewards or cash back: Points
Offer: This credit union card offers 5 points per dollar spent on gasoline purchases and electric charging stations. (It also offers 3 points per dollar spent on groceries, restaurants and streaming services.) Points value depends on the card you choose as well as how you choose to redeem your points. On average, points are worth 0.9 cents, according to WalletHub, but Investopedia calculated that points are worth 1.7 cents each when redeemed for travel. You must become a member of the credit union – you will apply to be a member when you apply for the card, and it requires a $5 opening deposit.
Annual fee: None
Sam’s Club Plus Mastercard
Point rewards or cash back: Cash back
Offer: 5% Sam’s Cash back on gas anywhere a Mastercard is accepted, up to the first $6,000 per year, then 1% Sam’s Cash back. Apply your Sam’s Cash to pay for Sam’s Club membership or for purchases at Sam’s Club or get cash back instead. To qualify, you must use your new account to make Sam’s Club purchases totaling $30 or more (excluding cash advances, gift card sales, alcohol, tobacco and pharmacy purchases) within 30 days of date of account opening.
Annual fee: None if you have a Sam’s Club Plus membership for $110 annually.
Bonus savings
You can save even more money by using these tips:
- Some grocery stores have loyalty cards that allow you to purchase gas at their own branded gas stations. Whether you shop at that grocery or not, purchase their gift cards using a store loyalty card for a discount. Then you have access to the gas pumps using the gift card.
- If the gas station has an app or card that gives you pennies off the price per gallon, use it along with one of your rewards cards to pay, stacking your savings. Make sure the station does not require their own branded credit card to access the loyalty card’s savings.
Other Living on the Cheap posts about cutting expenses:
