When the gas credit card was introduced in 1924, it was intended to promote brand loyalty as well as simplify payment for drivers gassing up out of state. Today, however, two-thirds of us would change brands or switch retailers in order to save a few cents per gallon, according to a recent survey by consumer reward giant, Excentus.
So much for loyalty.
While branded gasoline credit cards and the rewards they offer can yield savings, experts caution that remaining loyal to the card or cards in your wallet can actually harm your bottom line if you aren’t careful.
“If you have a Shell card and you go to the Shell station to get the rewards, then you aren't price shopping,” explains Beverly Harzog, consumer credit expert and author of “The Debt Escape Plan.” “It’s convenient, and you do earn rewards, but you need to consider how much more you're paying for gas compared to other stations.”
And since gas rewards cards typically have high interest rates, they can make that fill-up far more costly if you don’t pay off your balance every month.
“Credit cards are wonderful tools if used properly,” explains Bill Hardekopf, CEO of credit card comparison site lowcards.com. “But gas cards from gas companies usually have a big drawback – a very high APR (annual percentage rate). The marketing objective is to make the card look very attractive, but read the fine print and you’ll see that the increased rewards are only for a limited time."
Take, for example, the Chevron/Texaco Techron Advantage card: “It has a very attractive 30 cents per gallon fuel credit for the first 60 days, but then that drops to only 3 cents per gallon,” points out Hardekopf. “… And the APR is incredibly high, at 26.99 percent.” That means carrying a balance for even one month at that rate could wipe out a year’s worth of penny pinching.
There is one particular demographic that might be “pumped” to get a gas-brand credit card in their wallet, Harzog says.
“Gas cards issued by a gas retailer are much easier to get approved for, so these cards are a good option to use to build or to rebuild credit,” she says. “But since interest rates tend to be high, it's important to never carry a balance on a gas retailer card. Actually, that's my advice for every rewards credit card!”
For consumers with good or excellent credit, the better choice might be to select a regular credit card that offers enhanced rewards on gasoline purchases.
“These cards have much better APRs, and the rewards go beyond just gasoline purchases,” says Hardekopf. “On average, the rewards for a general rewards or cash back card are usually 1 percent, but the cards with enhanced rewards on gasoline purchases can pay 2 percent for every dollar spent on gasoline purchases.”
And, of course, you could always pay for your gas with cold, hard cash. Or bike to work.
Here is our roundup of the top 10 gas reward cards on the table today:
BP Visa with Pump Rewards
INTRO OFFER: Earn 25 cents back per gallon in rebates for every $100 in purchases made in the first 60 days after opening card (except for non-BP gas station purchases).
NOTE: Standard offer is to earn 15 cents back per gallon in rebates for every $100 in purchases made at BP.
Chevron/Texaco personal credit card
INTRO OFFER: Earn 10 cents of fuel credits per gallon purchased for the first 60 days.
NOTE: Maximum $300 in fuel credits can be earned per year.
CITGO Rewards Card
STANDARD OFFER: Earn 5 cents off per gallon as statement credits based upon total fuel purchases made within each billing cycle. Credits automatically post to monthly billing statement.
NOTE: Additional cards available for family members.
Gulf Platinum MasterCard
STANDARD OFFER: Earn 3 percent back for all purchases made at participating Gulf locations, and 1 percent made everywhere else.
NOTE: This card is currently unavailable for new applicants.
Holiday Smart Savings Credit Card
INTRO OFFER: Earn double instant gas discounts for the first 90 days after opening card.
NOTE: No annual fee; after introductory period ends, get 5 cents off per gallon instantly and 5 percent off in-store purchases.
Marathon Visa Credit Card
Earn 25 cents per gallon on all Marathon purchases when you spend at least $1,000 a month, 15 cents when you spend $500-$999 a month, and 5 cents when you spend less than $500 per month with the card.
Shell Platinum MasterCard
STANDARD OFFER: Earn 10 cents off per gallon with $500-plus in qualifying purchases; incremental until you can earn 20 cents off per gallon with $2,500 in purchases.
NOTE: Credits do not carry over to subsequent billing cycles.
Sinclair charge card
STANDARD OFFER: Get 10 cents off per gallon instantly.
NOTE: Cardholder must pay off full balance each month.
Sunoco Rewards card
STANDARD OFFER: Receive 5 cents off per gallon immediately.
NOTE: Allows ATM cash advances.
STANDARD OFFER: Earn 4 cents off per gallon if 50 - 74.9 total gallons are purchased during a billing cycle. Earn 8 cents per gallon when purchasing 75 - 110 total gallons per billing cycle.
NOTE: Rebates can be redeemed as a yearly check.