If you currently pay full price at the pump, you may be missing out on opportunities to increase your home savings. That’s because many rewards credit cards offer bonus points when used at the pump.
If used correctly, these rewards are like a discount on every gallon of gas you buy. And with the average price per gallon of gas being $3.61 as of May 2024, according to AAA, few consumers will turn down these savings.
It’s now fairly common to earn triple points (3 points per $1 spent) when you pay for gas with a rewards card. Interestingly, some of the best gas maps don’t feature the names of the major oil companies or their gas station brands. Instead, you’ll likely save the most using a general rewards credit card or one associated with warehouse clubs and credit unions.
Keep these tips in mind as you shop around for a card that will shave some off your fuel budget.
Based on 3%
The most lucrative gas cards offer rewards equal to 3% or more. Even better, many cards with high rewards rates don’t charge an annual fee, so you’re paying nothing to earn rewards that can be redeemed for cash back, gift cards, travel, and more.
Credit scores are important
Typically, rewards rates of 3x or higher are found on cards that require at least good credit or a FICO score of at least 670 to apply for. If you have a lower credit score, your credit card options may be limited. However, there are some cards for people with bad credit, limited credit, or no credit that offer rewards, albeit modest ones.
Note the capitalization
Some credit cards, especially those with a 5% interest rate and no annual fee, limit the amount of rewards you can earn on gas purchases. For example, you can earn 4% rewards on gas purchases up to $7,000 in purchases per year. Once you hit the cap, you’ll only earn 1% rewards on gas purchases until the new year. Before applying for a gas card, check the rewards limits (if any) and determine if the rewards are enough to cover your spending.
Beware of “deduction” rewards
Some credit cards, especially gas station branded ones, don’t give cash back or points based on a percentage of your purchases, but instead offer a specific discount, such as 6 cents per gallon. But when gas is $3 a gallon, that 6 cents discount is like a 2% discount on a regular basis. Also, gas station credit cards usually only give rewards when you spend at specific merchants.
Gas Station Rewards vs. Gas Pump Rewards
Many cards that offer generous gas rewards also reward purchases at gas stations, such as snacks and windshield wiper fluid. But some cards limit rewards to gas purchases at gas stations, and some gas cards only give more rewards when you spend money in-store (not at the pump).
Rewards credit cards have terms and conditions that govern their rewards programs; read them carefully to understand which purchases earn rewards and whether the list matches your expectations.
Warehouse cards have advantages and disadvantages
Warehouse stores like Sam’s and Costco are great places to buy cheap gas, and these deals, combined with the store’s co-branded credit cards, can offer high gas rewards. However, these cards only earn the coveted cash back rewards within certain annual limits, and the rewards redemption process can be cumbersome.
Also remember that you have to be a member of these warehouse clubs, which means you have to pay an annual membership fee.
Take advantage of card-related offers to accumulate rewards
Many rewards cards offer digital coupons in the form of offers linked to the card through the issuer’s app. You “clip” coupons by adding them to your card, and once you make a qualifying purchase, you’ll receive your savings, usually in the form of a bill credit. Offers linked to the card are often found when buying gas, so before your next fill-up, browse your card’s list of digital coupons for gas stations near you. If your card earns rewards at gas stations, you can save money through offers linked to the card and earn rewards from a new tank of gas.
Beyond Gas Rewards
When shopping for a premium guest credit card, consider whether the card offers rewards in other categories that align with your spending habits. That way, your gas credit card becomes an everyday card that you can use to pay for things like groceries, takeout, and streaming.
Plus, you might not be spending as much on gas as you think. According to the Bureau of Labor Statistics, the average American household will spend $2,635 per year on gas in 2023. Even with a 3% rewards card, that works out to $79.05 in cash back per year, or about $6.50 per month.
