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Petrol picks: Our favorite gas cards

by Peter Andrew

After a winter of freakish weather, you may well be looking forward to a warm and sunny summer vacation. If your travel plans involve a lot of driving, now could be a great time to apply for a card that gives attractive rewards for gas station purchases. But, if you or your family have a high annual mileage, it's worth reviewing your gas credit cards regularly -- even if you're going to be taking a staycation this year.

While gas prices may no longer be at their peak, they're still painfully high. In the last week of April 2014, they averaged $3.788 a gallon across the nation, according to the U.S. Energy Information Administration (EIA). That sounds great compared to the $4.165 record high reached in July 2008, but not so hot against the $1.670 recent low in December that year. For many households, they're a source of real financial hurt.

Types of gas credit cards

No plastic can take away that pain completely, but a number of cards can provide limited but welcome relief. As always, picking the right card is key to maximizing your rewards and other benefits.

Gas credit cards tend to come in two main forms:

  1. Those co-branded with oil companies. These tend to earn the best rewards only when they're used at gas stations carrying the same brand as the card. A few are "closed-loop," meaning they can only be used at the issuing merchant's outlets.
  2. General credit cards that offer particularly good rewards on gas station purchases.

Co-branded gas plastic

You have to consider three things with these:

  1. The convenience of outlets: If there's no gas station with the same brand as your card close to where you live, work or regularly travel, there's no point in your having that plastic. Driving out of your way to fill up could soon erode the value of your rewards.
  2. The amount of gas you use. Some cards expect you to pass certain spending thresholds before you can earn cash-back rewards on fuel purchases.
  3. The credit card rates charged. This is only an issue if you carry forward balances. But these interest rates vary enormously between issuers.

General credit cards that are good for gas

The great thing about a general rewards card that offers good earning rates for gas purchases is that you're not tied to a particular brand. You can fill up anywhere that's registered with payment processors (American Express, Discover, MasterCard and Visa) as a gas merchant, and earn the rewards your program offers.

The PenFed Platinum Cash Rewards Visa® Card may be the most attractive among these products, at least for those who buy a lot of gas. With the Plus version of this card (only available if you have another qualifying PenFed product, such as an active checking account, mortgage, auto loan, money market account … the list is long), you stand to receive 5 percent cash back on gas purchases, and pay no annual fee. That beats just about any oil company-branded product, and still gives you the freedom to fill up pretty much anywhere you want.

If you don't have one of those qualifying PenFed products, you might still get the standard version of that card, but that provides only 3 percent cash back on gas purchases, and comes with a $25 annual fee, waived in the first year. "Only" 3 percent? That's still 11.4 cents a gallon (using that aforementioned $3.788 per gallon figure), which is better than many oil company products.

Gas rewards for average/fair credit

You stand little chance of being accepted for either PenFed products unless your credit's excellent. If you're still rebuilding yours, consider the Barclaycard® Rewards MasterCard®. You get two points per dollar spent on gas, grocery and utility purchases. You should get one point for all other purchases, and can redeem your rewards for statement credits or (sometimes at advantageous rates) travel bookings.

Making the most of miles

A couple of years ago, the average American household spent over $2,900 per year on gas, according to EIA estimates. Given that many are bound to have spent much less, many others must still be facing horrendous fuel bills for their vehicles -- just to get to the places their family and work need them to be.

It's silly to pretend plastic can make a big difference to this part of the household budget. But the right card, chosen carefully, could pay for a family treat -- or a tire or two -- each year. And, right now, with that summer vacation finally on the horizon, every little bit helps.

Published 06/08/14 (Modified 01/07/15)


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