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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.
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:
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. Terms apply.
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. Terms apply.
Hilton Honors Surpass card from American Express: Offers six points per dollar spent at US gas stations. Terms apply. I value Honors points at about 0.5 cents each (especially after the upcoming devaluation), so I’d put this card at about 3% back.
Hilton Honors Card from American Express: Currently offers five points per dollar spent at stand alone gas stations. Terms apply.
Blue Cash Preferred® Card from American Express: Offer 3% cash back spent at stand alone US gas stations, not including Costco, Sam’s Club and other gas stations attached to stores. Terms apply.
SimplyCash Business card from American Express: 3% cash back on the first $25,000 spent on gasoline from U.S. 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 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.
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.
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.
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.
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. The American Express Platinum card has some of the best perks out there: cardholders enjoy the best domestic lounge access (Delta SkyClubs, Centurion Lounges, and Priority Pass), a $200 annual airline fee credit as well as up to $200 in Uber credits, and mid-tier elite status at SPG, Marriott, and Hilton. Combined with the 60,000 point welcome offer -- worth $1,140 based on TPG's valuations -- this card is a no-brainer for frequent travelers. Here are 5 reasons you should consider this card, as well as how you can figure out if the $550 annual fee makes sense for you.
The American Express Platinum card has some of the best perks out there: cardholders enjoy the best domestic lounge access (Delta SkyClubs, Centurion Lounges, and Priority Pass), a $200 annual airline fee credit as well as up to $200 in Uber credits, and mid-tier elite status at SPG, Marriott, and Hilton. Combined with the 60,000 point welcome offer -- worth $1,140 based on TPG's valuations -- this card is a no-brainer for frequent travelers. Here are 5 reasons you should consider this card, as well as how you can figure out if the $550 annual fee makes sense for you.