Gas prices in the U.S. are soaring to record levels, and they’re expected to continue going up until August. Right now, the nationwide average for a gallon of regular is $4.60, according to AAA; in California, it’s $6.07 a gallon.

One way to reduce pain at the pump is to use a rewards credit card. While you might think the best choice of plastic when filling up are those partnered with big oil companies, credit card experts told Checkbook some general-purpose rewards cards tend to offer better deals.

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Pick a Card, but Maybe Not Just Any Card

The cards affiliated with gas stations typically offer discounts of $.03 to $.10 a gallon. The best general-purpose rewards cards rebate four or five percent back for gas purchases. Do the math on a typical fill-up, and you’ll see that the gas cards aren’t offering very good deals: On a 15-gallon fill-up, at $5 a gallon, a discount of $.05/gallon equals only a one percent savings; even a $.10 discount provides only a two percent savings.

With this example, you’d save $.75 to $1.50 off the $75 fill-up with gasoline-only cards and $3.75 with a credit card that pays five percent cash back on gas purchases. As the price of gasoline goes up, the spread between the flat rate and percentage discounts will grow even larger.

“Go for that percentage discount, rather than just the flat five- or 10-cent discounts,” said Ted Rossman, senior industry analyst at Bankrate.com.

“A general-purpose rewards credit card has a number of other advantages over the credit cards that can only be used at a specific gas station,” said Bill Hardekopf, senior industry analyst at Money Crashers. “You can use and earn rewards at any gas station, and for any other types of transactions you want to make, whether it be restaurants, clothes, or groceries.”

Before signing up for any card, check the fine print. There may be a cap on gas-purchase rebates, after which the cash-back discount drops to a lower rate. For example:

  • USAA’s Cashback Rewards Plus American Express card rebates five percent on gas and qualifying military base purchases up to $3,000 per year. 
  • Costco’s Anywhere Visa Card by Citi caps its four percent cash back on gas purchases at $7,000 per year. After that, the discount falls to one percent.

For someone with little or no credit history, a gasoline-only credit card, like a retailer-issued credit card, may be easier to get, but it’s not the only option.

“If you’re starting out, you might be better off just getting a more general-purpose secured card, or student card, or some other type of starter card, rather than going all in on the gas brand,” Rossman advises.

While gas cards typically do not charge annual fees, they often have significantly higher interest rates than general-purpose credit cards. If you carry a balance, this can really add up.

“The big pitfall, almost without exception, is that gas-company cards charge very high interest rates, often something like 25 percent,” Rossman said. “And I just think they’re limiting. You want to make sure you have a card that can be used broadly.”

WalletHub, a personal finance website, analyzed more than 1,500 credit cards for its May 2022 “Best Gas Credit Cards” report, and recommended eight general-purpose rewards cards. Each pay three to five percent cash back on gasoline purchases with no annual fee. Most require applicants have at least “good” credit scores.

Ignore the Hype

Oil company credit cards typically have introductory offers—in bold print—that look very appealing. Again, read the fine print before applying. For example:

  • The Techron Advantage card currently offers a sign-up bonus of $.37/gallon in fuel credits. But you can use the card only at Chevron or Texaco stations, and the bonus offer lasts for 90 days. After that, you’ll earn only $.03 back per gallon.
  • Shell’s Fuel Rewards card offers a discount of $.30/gallon, but you get that only on your first five fuel purchases; after that, the savings drop to $.10/gallon.
  • Sunoco Rewards Credit Card offers a $.25/gallon credit for the first 60 days. At the end of the promotional period, it drops to $.05/gallon.

More Ways to Save

Having a traditional credit card with great gas rewards allows you to shop for the lowest price wherever you are. For example, the Safeway gas station near my house is always less expensive that other stations in the area. This week, it’s about $.55 gallon cheaper than the other nearby major brands. I can use my Safeway rewards points to save up to $1 a gallon, and I then charge the gas to my general-purpose rewards credit card to get cash back. Stacking my savings this way can pay off significantly.

If you’re a Costco member, you probably know it sells fuel at discounted prices. You also get a four percent rebate when buying gas using a Costco credit card, wherever you buy gas.

Most major oil companies offer a discount when you use their app, and you can use any card to pay. 

Conoco is currently offering a discount of $.10 per gallon discount for those who fill up at Conoco, Phillips 66 or 76 stations and pay with the My Conoco App. 

At Shell, pay with its app and get a discount of $.05 a gallon. Fine print: You are required to make at least four fill-ups of more than five gallons every 30 days for that discount to continue for the next month. 

More Info

Checkbook: How to Save Money at the Pump and Boost Your Car’s Gas Mileage

Bankrate: Best gas credit cards for May 2022

Money Crashers: 7 Best Gas Credit Cards—Reviews & Comparisons

NerdWallet: How to Choose a Gas Credit Card

 

 

Contributing editor Herb Weisbaum (“The ConsumerMan”) is an Emmy award-winning broadcaster and one of America's top consumer experts. He is also the consumer reporter for NW Newsradio in Seattle. You can also find him on Facebook, Twitter, and at ConsumerMan.com.