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Maximize Monday: Earning the Most Miles and Points on Gas Purchases

by on March 25, 2013 · 22 comments

in Credit Cards, Maximize Monday, TPG Contributors

TPG contributor Jason Steele looks at credit cards with category spending bonuses, travel shopping portals and at various airline and hotel partnerships as he plots out strategies to maximize points earning on fuel purchases.

Perhaps the only good thing about high gas prices is the opportunity to earn more points and miles when you fill up – small consolation with prices soaring over $4 per gallon, but at least it’s a silver lining. As always, before you commit to a card or a strategy, do some calculations based on your average spending to see which card will earn you the most return on your money and the rewards that you want. Let’s take a look at the major credit cards offering points, miles, and cash back bonuses specifically for gasoline purchases. Note, this list does not include cards with offers only valid at specific retailers.

We all spend a lot of money on gas - we should earn a lot of points too.

We all spend a lot of money on gas – we should earn a lot of points too.

CREDIT CARD CATEGORY SPENDING BONUSES

Several credit cards earn travelers multiple points or miles per dollar spent on fuel purchases. Here are the top earners:

AMEX

Premier Rewards Gold card from American Express: 2 Membership Rewards points per dollar spent at stand alone gas stations. I value Membership Rewards points at about 1.8 cents each, so this amounts to a 3.6% return on your dollar.

Mercedes-Benz card from American Express: Though most of the coverage of Mercedes-Benz Amex co-branded cards is on the Platinum version, which offers all the same perks as the personal Platinum card, the regular version of this card actually offers 3 Membership Rewards points per dollar on gas purchases of up to $400 at standalone gas stations in the US. That’s about a 5.4% return on your investment by my estimation.

Hilton HHonors Surpass card from American Express: Offers six points per dollar spent at stand alone gas stations. I value HHonors points at about 0.5 cents each (especially after the upcoming devaluation), so I’d put this card at about 3% back.

Hilton HHonors card from American Express: Currently offers six  points per dollar spent at stand alone gas stations, but on the first billing cycle after May 1 will offer five points per dollar for about a 2.5% return on spending by my estimations.

American Express Blue Cash Preferred: Offer 3% cash back on the first $6,000 spent at stand alone gas stations, not including Costco, Sam’s Club and other gas stations attached to stores.

SimplyCash Business card from American Express: 3% cash back on the first $12,000 spent on gasoline from stand alone stations.

TrueEarnings Business Card from Costco and American Express: 4% cash back on the first $7,000 of fuel purchases at stand alone gas stations and Costco.

Update: The terms of the True Earnings Card from Costco have changed. View the current offer here.

True Earnings Card from Costco and American Express: 3% cash back on the first $4,000 of fuel purchases at stand alone gas stations and Costco.

Asiana Airlines American Express Card: Earn 2 Miles per dollar spent on gas and grocery store purchases. Note that Asiana is a Star Alliance member. Their award chart is distance based and offers a very generous stopover policy.

CHASE

Chase Ink Bold and Chase Ink Plus: The two Ink cards offer double Ultimate Rewards points while the Ink Classic and Ink Cash dole out 2% cash back on gasoline and hotel purchases. Ink Cash and Classic offer that on the first $25,000 of spending each cardholder year, while Ink Bold and Ink Plus have a $50,000 cap per cardholder year. I value Ultimate Rewards points (on the Bold and Plus because you can transfer them to travel partners) at 2 cents each conservatively, so I’d put the value back you get on these cards at about 4%.

Priority Club Select Visa: Earn 2 points per $1 spent on purchases at gas stations, grocery stores, and restaurants. I value Priority Club points at about 0.5-0.7 cents each, meaning you’re getting a 1.4% return at most.

CITI

Citibank AT&T Universal Business Rewards Card: Cardholders earn three ThankYou Points for every dollar spent at office supply merchants, gas stations and on professional services. Those who hold a Citi Thank You Premier card can earn 1.33 cents in value per point, and some cardholders can now transfer those points to the Hilton HHonors program. So you could be getting almost a 4% return on your dollar here.

OTHER

PenFed Platinum Rewards Visa Card: This card offers a lucrative 5% cash back per dollar spent on gasoline purchases up to $50,000 per year. Points are worth one cent each for many items including gift cards and travel reservations, or you can put the rebate towards your statement, so if you charge $200 on gas in a month, your bill will only post as $190. Check out this post for more information on how to maximize the Pen Fed program.

US Bank FlexPerks Visa Signature: This travel rewards cards earns two FlexPoints for every $1 spent on gas, grocery or airline purchases – whichever you spend most on each monthly billing cycle – so in order to take advantage of this bonus spending category, you’ve got to keep a careful tally of which expenses you’re spending the most on. For instance a single expensive airline ticket one month could throw off your whole spending strategy. FlexPerks points are redeemable at between 1.33-2 cents each, so your value back is 2.66-4%.

Buying Gift Cards For Category Spending Bonuses

Gift card for gasoline retailers are available at many supermarkets, drug stores, department stores, and office supply stores. So if you already have a card that offers a great category spending bonus, and you can find a gift card to your favorite gas station there, you have the opportunity to leverage other credit card bonuses if they offer them at those merchants.

Gas gift cards are often a poor use of points.

Gas gift cards are often a poor use of points.

On the flip side, if your credit card is offering gas stations as a bonus spending category (see below), then you can use that credit card to buy gift cards that many of them sell to various other merchants including restaurant chains and Amazon.com, from which you can buy pretty much anything these days.

Gas Deals on Cards with Rotating Bonus Spending Categories

Chase Freedom: Currently (and just for another week or so!) offers 5% cash back on the first $1,500 spent at gas stations, drug stores and at Starbucks through March 31st, 2013. Holders of Ink Bold, Ink Plus, Sapphire Preferred, and Palladium cards can transfer points to travel partners or book travel at 1.25 cents per point.

Citi Dividend Platinum Select and Discover don’t have gasoline for a bonus category in the first or second quarter of 2013. And while these card issuers haven’t released the bonus categories for the rest of the year, Discover has given a pretty strong hint that gasoline will be a Q3 bonus in the “Summer Fun” category.

Discover it

It hasn’t been confirmed yet, but there’s a strong chance gas will be one of the Discover card’s category bonuses this summer.

Shopping Portals

I looked through over a dozen shopping portals to find gas gift cards, but came up empty for now. In the past, however, and likely again in the future, you should be able to redeem Ultimate Rewards points and American Express Membership Rewards points at a rate of anywhere between 0.75-1 cent per point for gas gift cards from merchants including Exxon, Mobile and BP. I obviously wouldn’t suggest doing so unless you’ve got tons of extra points to burn and no cash to pay for your gas since you can get a lot more value out of these points by taking advantage of both programs’ travel partners.

My Personal Strategy

Based on the cards in my own wallet, the most valuable points-earning opportunity when it comes to gas is to max out the Chase Freedom card’s 5x category spending bonus at $1,500 in spending for a total of 7,500 Ultimate Rewards points, which I can transfer to travel partners thanks to the fact that I also have the Sapphire Preferred and Ink Bold (and Ink Plus for now). That means, I’m essentially earning 5 United miles per dollar I spend on gas for these three months, and since I value United miles at 2 cents apiece, that’s like getting a 10% rebate on my spending – an even better deal considering the Freedom card has no annual fee. 

When gas is not part of Freedom’s category spend bonuses, I almost exclusively use my American Express Premier Rewards Gold for gas since the base earning on that card is 2 points per $1 on gas plus Amex gives a 15,000-point bonus when you hit $30,000 in spend, essentially making the first $30,000 spent worth 1.5 points per dollar base earning if you can hit that threshold.

Disclaimer: This content is not provided or commissioned by the credit card issuer. Opinions expressed here are author.s alone, not those of the credit card issuer, and have not been reviewed, approved or otherwise endorsed by the credit card issuer. This site may be compensated through the credit card issuer Affiliate Program.

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  • Rich

    Super timely, thanks. I’ve been doing some buying of shell gift cards (shell allows $.10/gal off from Kroger points) at OD, but it’s a bit of a hassle. I think I’ll just end up using the Ink+ straight up for gas.

  • Dollar millionaire

    I think the Costco Amex business would be the best 4 percent cash back up to 7000 and Costco gas is cheap if available about 20 cents then the normal stations. Only negative is you have to wait to get the reward once a year.

  • Kaushal

    I use Chase Freedom when gas is in the 5% CB category and PenFed Platinum Rewards as default gas card.

  • Ricardo Seir

    I think the best deal is to buy Shell gift cards at OD with the ink cards. You not only get 5 points per dollar, but when you use the card at the gas station, is treated as cash and not a credit card. In my state, there is usually a 10 cents difference between the cash price and the credit price. If you add to that the 10 cents off you can get for Kroger rewards, then thats a big difference. always check the price at costco also, because sometimes there is a big difference in prices and the whole shell thing is not worth it.

  • Craig

    Mercedes benz credit card gets 3x MR on gas. :)

  • TravelScrounger

    I don’t think your math is right on the Benz – 3 x 1.8 = 5.4.

  • thepointsguy

    Good call, we added it!

  • JakePB

    Brian, after you’ve exhausted the Chase Freedom option, why on Earth wouldn’t you then leverage the OD/gas card strategy? Aren’t 5 UR pts worth much more than 2 MR pts in your estimation? Also, if you’ve got bluebird $ to spend, you can always use that at Costco to get around the “stand alone” limitations imposed by other cards, yes?

  • http://www.facebook.com/amex.texan Amex Texan

    Not sure about other places in the US, but where I live the cheapest gas is at a Sam’s club gas station for which you cannot buy GC at OD. And the price difference between Sam’s and the best option for which GCs are available is in my opinion almost always larger than any benefits from your strategy (even before incremental costs to stop by OD on the regular basis are factored in)

  • thepointsguy

    Ha ha yes, thanks, pre-coffee math! I fixed it.

  • JakePB

    You can always go the Bluebird route and get the best of both worlds. Since Amex is in your screen name, I assume Sam’s accepts BB.

  • Jon

    Does AmEx Business Platinum get 3x MR as well, or just the Mercedes card?

  • thepointsguy

    Office Depot is an option, but I am also trying to hit the $30k spend threshold on Premier Rewards. Also, I don’t buy that much gas, so it’s not really worth the time/hassle of dealing with gift cards for me

  • thepointsguy

    Hard to beat 5x points on Ink Bold/Plus at Office Depot!

  • Ryan

    The regular MB amex also gets 2x on dining. Thoughts on this card? Seems pretty comparable to CSP.

  • SamOH

    You can also double dip with Kroger for at least 19-20% off gas if you are creative …by buying Kroger/Turkey hill gift cards with Amex cash blue/discover/freedom (5-6%),then buy shell/bp gift cards with the Kroger /Turkey hill gift cards when they run their 4x fuel points promo (like now) on gift card purchases (14% off if you redeem the full 35 gallons).
    Keep your gift card purchases $75 or less to avoid driver license info requirement buy cashiers …

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