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Update: Some offers mentioned below are no longer available – The Amex EveryDay Preferred Credit Card from American Express, Wells Fargo Propel American Express® Card, Citi ThankYou Premier Card
There are plenty of solid travel rewards card options when it comes to getting a solid return on your gas purchases. However, the recently introduced Wells Fargo Propel American Express Card might just shake up the competition. TPG Senior Points & Miles Contributor Richard Kerr compares all the top options below.
Update: As a TPG reader points out below, the Costco Anywhere Visa Card by Citi is very much worth considering as well. This card offers 4% cash back on the first $7,000 spent on gas each year; then 1% thereafter. Additionally, the Ink Plus Business Card offers 2x Ultimate Rewards points on the first $50,000 spent on gas each year, the equivalent of a 4.2% return based on TPG’s most recent valuations.
Every once in a while, a lesser-known credit card stands out for offering a surprisingly good return on routine purchases. One such example is the Wells Fargo Propel American Express Card, which TPG Points & Miles Editor Sarah Silbert recently reviewed. This card offers some solid bonus categories — especially 3x points on gas. Could this make the Propel card the best option for your gas purchases?
The points you earn with this no-fee card can be redeemed through Wells Fargo’s Go Far Rewards program, which includes categories such as travel, auctions for experiences and travel packages and merchandise. Points are worth 1 cent each when redeemed toward cash back, gift cards, travel or merchandise.
The Wells Fargo Propel American Express Card becomes an incredible option for gas purchases when you pair it with the no-fee Wells Fargo Visa Signature Card. When you combine your points earned from the Propel with the points earned with the Visa Signature, you can redeem all your Go Far Rewards points for 1.5 cents each toward the purchase of airfare.
The flights you book for free using your Go Far Rewards are then treated like revenue fares by the airline, so you earn redeemable and elite-qualifying miles. Just this summer, I used some of my Wells Fargo points to book a business-class positioning flight that helped me complete an American Executive Platinum status challenge.
This means that, when paired with the Visa Signature card, the Wells Fargo Propel American Express Card gives you a 4.5% return that can be used toward free airfare with any airline, not counting the added value from any annual bonus you may earn. That’s a solid return for two cards that don’t charge annual fees, but how does this stack up to the competition?
The Chase Freedom Card usually offers a 5%/5x bonus on purchases at gas stations one quarter per year (this year, it was offered from January to March). If you also hold an Ultimate Rewards-earning card such as the Chase Sapphire Preferred or the Ink Plus Business Card, you can redeem cash back as points to get a 10.5% return (based on TPG’s valuations). The downsides here are that you have to pay a $95 annual fee for the Sapphire Preferred compared to no annual fee for the Propel card, and there’s also a $1,500 cap for earning 5% cash back or 5x Ultimate Rewards points on bonus category spending each quarter. With the Propel, there’s no limit to how many bonus points you can earn, and the bonus category is offered year-round rather than one quarter per year.
Then there’s the Discover it® Card, which is much like the Chase Freedom Card in that it has rotating quarterly bonuses that offer 5% cash back on up to $1,500 in purchases. One of the card’s other main selling points is that Discover will double all earnings for the first 12 months of cardmembership — that means 10% cash back on quarterly bonus categories. Gas was a bonus category in the first quarter of 2015 and 2016. If you get the card now with the bonus campaign, you could get lucky with gas purchases being offered in one of the first two quarters of 2017. Just keep in mind that you’d only get that 10% return on gas purchases for one quarter in one year, compared to 4.5% all the time with Wells Fargo Propel American Express Card and the Wells Fargo Visa Signature Card.
The Citi ThankYou Premier Card earns 3x points on all travel including gas. You can combine these ThankYou points with those earned by a Citi Prestige Card, and your points earned from gas purchases would be worth 1.6 cents each toward airfare with American Airlines or 1.3 cents each toward airfare with any other airline. Unfortunately, this is all changing in July of next year when all points will be worth a flat 1.25 cents apiece toward airfare. Citi also pulled the sign-up bonus for the Premier Card a few months ago, and the card carries a $95 annual fee (waived for the first year). Plus, the Prestige charges $450 a year— that’s $545 in annual fees you have to pay in order to get 1.6 cents per point from gas purchases, and you’ll only be able to enjoy these higher redemption values through next July.
The Amex EveryDay Preferred Credit Card earns 2 Membership Rewards points per dollar on all purchases at US gas stations. The 50% bonus you earn on all purchases when you have 30 or more transactions on your monthly statement sweetens the detail. If meet that threshold, earning 3 Membership Rewards points per dollar on gas is a great deal. TPG values Amex points at 1.9 cents each, giving you a 5.7% return on gas purchases before you factor in the 50% bonus (which bumps the return up to 8.55%). This is a higher return than the Wells Fargo cards, however you’re stuck with the hurdle of award seat availability and not earning any elite or redeemable miles on the ticket booked with an Amex parter. I prefer the flexibility and additional earnings from flights booked with Wells Fargo Go Far Rewards, but you’ll have to decide what make more sense for you.
At least until July 23, 2017, utilizing the Citi ThankYou Premier Card in conjunction with the Citi Prestige Card will give you 4.8% cash back on gas purchases toward airfare with American Airlines. While the Wells Fargo Propel American Express Card used in conjunction with holding the Wells Fargo Visa Signature Card may give you 0.3% less in value, you don’t have to book with only American Airlines to keep the highest value. The flexibility to book any airline for 1.5 cents per point — along with the fact that the Visa Signature and Propel have no annual fees — can make this duo a better option than using the Citi cards when it comes to gas purchases. Any Wells Fargo relationship bonus you earn will only increase the 4.5% return you already receive from the Propel.
After July of next year when the Prestige devalues, the Propel card (in conjunction with holding a Wells Fargo Visa Signature Card) will be the best option for gas purchases during the quarters of the year when the Chase Freedom and Discover it Card are not offering 5x points or 5% back on gas (assuming they do offer the bonus one quarter). If you have a existing relationship with Wells Fargo, you might also want to look at the $45 annual fee Wells Fargo Propel 365 American Express Card which can offer you up to a 50% annual bonus on base points earned.
Featured image courtesy of Shutterstock.
Which card do you use to fill up your tank?
The Points Guy Assessment:
The Chase Sapphire Preferred is a great pick for the beginner and the frequent traveler. The CSP has superb travel benefits, double points on certain purchases, and a 50,000 point sign up bonus. The $95 annual fee is waived the first year so this puts it as one of the less expensive cards, while still allowing you to earn one of the most valuable point currencies.
- Earn 50,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $625 toward travel when you redeem through Chase Ultimate Rewards®
- Chase Sapphire Preferred® named a 'Best Travel Credit Card' by MONEY® Magazine, 2016-2017
- 2X points on travel and dining at restaurants worldwide & 1 point per dollar spent on all other purchases.
- No foreign transaction fees
- 1:1 point transfer to leading airline and hotel loyalty programs
- Get 25% more value when you redeem for airfare, hotels, car rentals and cruises through Chase Ultimate Rewards. For example, 50,000 points are worth $625 toward travel
- No blackout dates or travel restrictions - as long as there's a seat on the flight, you can book it through Chase Ultimate Rewards