Editorial Policy

Gas cards: Pumped up rewards or running on empty?

Dawn Papandrea

August 14, 2015

A couple of years ago when gas prices peaked, finding ways to save at the pump was all the rage. While it may not seem as dire a concern today, there are still loyalty programs, discounts and incentives to get people to stick with one gas brand, chief among them, co-branded gas rewards credit cards.

The thing is, due to more valuable rewards card options, gas cards seem to be running on fumes. According to a CreditCards.com survey of the 20 largest gasoline-brand cards, fuel savings averaged about 10 cents back per gallon. For those who spend $150 on gas per month, that's a savings of about $6, or 4 percent.

That's hardly a budget-changing amount of savings, says Jason Steele, senior points and miles contributor to ThePointsGuy.com. “Gas cards usually offer inferior levels of rewards and have uncompetitive rates and terms compared to general rewards cards,” he says.

Still, co-branded gas cards might be a good option for certain consumers. Take a look at some facts about gas cards to see if they're worth getting pumped up over.

First things first: “Anytime you're considering a rewards cards, you should be talking about a card you can pay off in full every month,” says Liz Weston, a personal finance columnist and credit expert. “It just doesn't make financial sense otherwise because you'll pay a lot more in interest than you'll ever save on gas.”

Generally speaking, the people who will benefit most from a co-branded gas card are those who are trying to improve their credit and might not qualify for other credit cards. “Gas cards are often easier to get than regular credit cards,” says Steele. “They are one of the first rungs on the ladder after a secured card.” Co-branded gas cards usually do not have an annual fee either, a feature that is attractive to people with lower credit scores who might not qualify for unsecured cards.

To maximize any potential rewards, though, Steele says it only makes sense if you can get a card for the gas brand that more often than not offers the lowest price in your area.

The other reason you might want a gas card is if paying for gas is all you'll use it for. “Gas pumps are incredibly insecure. It's easy to compromise a gas pump and steal personal information,” says Weston. If you're on the road a lot and prefer to use plastic, using one card — other than your debit card — can make it easier to track, she says.

Lastly, because gas is cheaper now than it used to be, you actually get a better return from gas cards these days, says Matt Coan, owner of Casavvy.com, a credit and banking comparison site. “If you're getting off a certain number of cents per gallon, it's more of a percentage off now than when gas was $4,” he explains.

The drawbacks

One notable thing missing from gas rewards programs is attractive signup bonuses, says Coan. “More general cards usually offer signup bonuses if you spend $1,000 in three months, for example. You won't get that with a co-branded credit card,” he says.

Another issue is that when you have a gas card, you're more likely to drive past a lower priced gas pump to go to your card's retailer, says Steele. “Any savings you get might be diminished or lost because you are paying more for gas,” he says. Add to that the fact that some gas stations charge as much as 10 cents more for not paying cash, and that gas card can actually cost you money.

Finally, Steele points out that co-branded gas cards offer very confusing terms. “If something doesn't provide a lot of value, you want it to be as complicated as possible,” he says. And gas card fine print is about as complex as it gets.

Better ways to save at the pump

Saving money on gas doesn't necessarily require a gas-specific credit card. “Some general rewards cards might offer 3 percent rewards on gas,” says Weston, on top of the more generous points opportunities such as 6 percent on grocery purchases.

Coan says one way he cashes in on gas points is by taking advantage of free loyalty programs. He uses the Shell Fuel Rewards loyalty program, which is not a credit card, but saves him 3 cents per gallon just for keying in a rewards number. Beyond that, he makes some online purchases through Shell's shopping portal, which connects with various online vendors, to earn additional points.

Lastly, Steele points out that your driving habits can have a more far-reaching effect on your fuel savings than any points program. “By driving a more fuel efficient vehicle or cutting back on driving, the savings will far exceed that of a rewards card.”

For those in the process of rebuilding their credit, co-branded gas cards are a good option. For the rest of consumers, these experts agree that there are more favorable rewards programs out there, from cash back to travel rewards cards. “Even though Americans spend a good chunk of money on gas,” says Steele, “getting a co-branded gas card would be pretty far down on my list as far as how to save money.”