Editorial Policy

Gas Rewards Can Cut Commuting Costs

Eva Norlyk Smith Ph.D.

April 4, 2013

With average gas prices at $4 a gallon (or dangerously close) in many parts of the country, just getting to work can quickly eat up the money earned there.

“We've seen two-income couples spending over $300 combined a month on gas for the cars,” says Chad Gentry, executive director of the Colorado-based credit counseling organization mpowered. “Add the cost of car payments and insurance, and for some families, transportation can make up 25 percent of monthly net income. That's what your housing should cost, not your transportation.”

Lifestyle changes (like a more fuel-efficient car or a move closer to work) are the best ways to cut fuel costs. However, if that's not an option, rewards cards may offer a way to shave a bit off your transportation costs.

Branded gas cards, or generic?
Most oil companies, including Shell, BP and Chevron feature cards offering rebates on gas. However, a regular rewards credit card geared toward gas savings will likely be your best bet. Why? Most gas credit cards affiliated with the large oil companies offer less flexibility and generally lower rewards. For example, gas rewards cards from BP come with the equivalent of a 1.5 percent cash rebate per gallon purchased at BP stations and 0.5 percent on all other purchases. The Shell Drive for Five card offers just a 5 cents in savings per gallon, the equivalent of a 1.3 percent rebate at the average $3.80 per gallon.

Some general rewards cards, meanwhile, offer fuel rewards that can shave as much as 5 percent off at the pump, the equivalent of a 19-cent savings per gallon, assuming a cost of $3.80 per gallon. Plus, the best cards feature higher-than-average rewards for other purchases as well.

The most rewarding fuel rewards
Here are our picks for the cards that will reward you the most at the gas pump:

American Express Blue Cash Preferred

What we like:The AmEx Blue Cash Preferred is the best all-around rewards card for saving money on everyday expenses, not just on gas purchases. The card lets you get an uncapped 3 percent of your money back when you fill up at any U.S. stand-alone gas station, so you're not limited to shopping with one oil company.

The savings are even better at supermarkets, where you get 6 percent cash back on any large chain supermarket. The card also gives 3 percent cash back on select major department store purchases and 1 percent on everything else.

To sweeten the deal, make $1,000 in purchases within the first three months, and AmEx throws in an additional rewards credit of $150.

What to look out for:The Blue Cash Preferred has an annual fee of $75, so if this is too much for your liking, the no-fee Blue Cash Everyday card offers a viable alternative, with 3 percent cash back on supermarket purchases, 2 percent on gas and 1 percent on everything else.

The PenFed Platinum Cash Rewards Card

What we like:If you don't mind jumping through a few hoops to become a member of the Pentagon Federal Credit Union, the PenFed Platinum Rewards card has the highest cash-back rate for gas available. The card lets you earn an uncapped 5 percent cash back on all gas purchases and has no annual fee.

What to look out for: This card requires excellent credit, so it's not an option for everyone. Plus, the cash-back rate for non-gas purchases is pretty low at 0.25 percent. Moreover, since PenFed is a credit union, you will need to become a member first. If you're not a member of the armed forces (or have a family member who is), you can become a member of the National Military Family Association by paying a one-time fee.

Chase Freedom

What we like:The Chase Freedom card awards 5 percent cash back in rotating bonus categories, which change quarterly. That might not be quite so attractive, except gas purchases qualify for the 5 percent discount twice a year. With a 1 percent cash-back savings the rest of the year, you will average 3 percent in savings on gas purchases over the year. If you time other purchases well, you can shave an additional 5 percent off purchases at Kohl's, Lowes, drug stores, restaurants and theme parks the rest of the year, (on up to $1,500 spending each quarter). The card offers an unlimited 1 percent cash back on all other purchases. An additional perk is the $100 sign-up bonus after you spend $500 within the first 3 months.

What to look out for: You have to enroll in the 5 percent offer for each quarter, and if you forget, you're left earning a modest 1 percent cash back on your purchases.