With prices at the pump so high, are gas credit cards worth

High gas prices are unavoidable for Americans who commute to work by car or who plan to hit the road over July 4th weekend

But there are ways for motorists to save money at the pump, even with the national average for regular gas at $4.87 a gallon Wednesday.

Indeed, Americans are looking for ways to fill up for less: Internet searches for fuel and gas cards have risen rapidly in tandem with the spike in gas prices, according to a research note from Bank of America Global Research. 

There are a few different types of gas cards, including gas station-issued credit cards from Chevron, Shell, Texaco and other chains which come with fuel discounts and rewards. Some general credit cards from payment companies like American Express and Visa also offer valuable cash back or points when cardholders spend money on gas.

“Obviously it’s great to get rewards from a gas card, assuming you are paying in full and avoiding interest on your statement,” said Ted Rossman, senior credit card analyst at BankRate.com. “But the best gas card may not be the first one that comes to mind.”

While consumers might be drawn to cards from gas stations themselves, like Shell, they tend not to offer robust rewards, according to Rossman. Cardholders typically only get between 5 and 10 cents per gallon of gas, and the cards tend to have high interest rates, too.

“You don’t want to rack up continuous debt, so if people don’t have much discipline with credit cards it might be best to use cash, because credit card debt is no good, especially with interest rates being high,”  said David Chang, a contributing credit card expert with The Ascent.

A branded credit card also probably only makes sense if you happen to live right next to a Shell or Texaco station from which you purchase the bulk of you gas, since it won’t earn you rewards at other brands’ pumps.

“If you live right next to a Shell station and you drive a lot, you have a commute and always fill up at that Shell, then a gas card may be beneficial,” Chang said. 

What kind of card should I get?

With gas prices as high as they are, a percentage discount will be worth more than shaving a few cents off of your cost per gallon of gas. 

Aim for a card that offers 5% cash back. “A percent is more meaningful,” Rossman said. 

If gas costs $5 a gallon, a 5% cash back card translates into 25 cents off every gallon, versus the 5- or 10-cent discount a gas station card would provide. 

For example, the Sam’s Club Mastercard offers 5% cash back on up to $6,000 worth of gas purchased at any gas station. The Costco Anywhere Visa gives customers 4% cash back on up to $7,000 worth of gas purchases, not just at Costco. 

In 2019, the average American household spent roughly $2,000 on gas, according to the Bureau of Labor Statistics. With gas prices now about 50% higher now than they were that year, a rewards rate of 5% cash back can save the average American family $157 a year on gas, according to Rossman’s calculation. That’s the equivalent of a few free fill-ups a year. 

“You’re not going to get rich off of it, but the point about these cash-back cards is you get something for nothing,” he said. “You would have spent the money anyway and you can avoid interest by paying off your balance in full. It’s kind of like free money.”

Should I get a new card?

If you spend a lot of money on fuel, getting a new card for the purpose of saving money on gas may be worth it.

If you’re not a huge spender, one of your existing credit cards may already offer 2%-3% cash back on gas, which might be good enough.

The American Express Blue Cash preferred, for example, gives 3% cash back at U.S. gas stations that can be redeemed as a statement credit at the end of each month. 

“It’s not the top of the market, but it beats nothing,” Rossman said.

MoneyWatch: High gas prices cause Americans to cut back on spending


Stacking discounts

To save even more, combine rewards cards with other money-saving strategies like downloading your gas station’s payment app. Branded apps typically give discounts of 5 to 10 cents per gallon when you pay through the app, using a card of your choice. 

“When you use a payment app, you’ll see the price you pay go down right as you’re filling up,” Rossman said.

This technique both lowers the price of gas per gallon at the point of sale and earns you rewards after the fact. These rebates either appear as a credit on your monthly statement or as a direct deposit or check. 

Not taking advantage of any fuel-savings programs at all is a mistake, according to GasBuddy analyst Patrick DeHaan.

“If you’re just going to a station and swiping your card, you’re generally paying more than you have to,” he said. 

Reduce your mileage

Simply driving less, or more efficiently, is also a great way to save money on gas. 

Motorists should aim to reduce the distance they drive by 75%, according to Chang.

His tips include running errands all at once instead of taking multiple trips, traveling light by removing extra weight from a vehicle or a cargo hatch from atop a car or truck, and not idling. 

Of course, remote work can also save you money since you don’t have to commute to the office every day. “The best way to save is to drive less. Working from home can act like a pay raise if you’re not spending money on gas,” Chang said.