It is easy to forget that there are other rewards cards out there offering returns besides travel and cash back.   Many gasoline retailers offer there own branded gas card.    With the dramatic increases in gas prices over the last year, it is tempting to consider getting a gas reward card.   Lets take a moment to see how these stack up.

What Is Their Value?

Take the BP Chase card for instance.  It offers 5% rebate on all gas purchases at BP, 2% on all travel and dining, and 1% nearly everywhere else.   Make no mistake, 5% is a fantastic return, but realistically, how much money will you save with it?    Suppose you have a long commute and you travel 20,000 miles a year with a vehicle that gets an average of 20 miles per gallon.    Even in the worst case scenario, if gas averages $4.00 per gallon over the next year, you will spend $4,000 on gas.  5% of that is $200.   If you drive less and/or have more fuel efficient vehicle, you will see substantially less rebate.    While that is nothing to sneeze at, it is hardly enough to take a vacation with.  2% on dining is very good too, but not an exceptional rate of return.

How They Sweeten The Pot

BP offers to double the reward for the first 90 days, however that is really only going to add up to about $60 addtional rebate for fuel purchases, even in the gas guzzling scenario I laid out above.

Why This Might Not Work For You

First of all, your 5% savings assumes that the retailer offering the card, in this case BP, is actually the place that you would have purchased gas.   If there is a less expensive retailer near you, such as Costco, your supermarket, or an independent station, you are not going to be saving much, if any, money using your reward card.   Finally, if you have to drive even a short distance out of your way to get to the station, you are also loosing both time and money.

In the end, there are several Visa, Mastercard, Amex, and Discover cards that offer varying degrees of rebates on gas.   These allow you to stay flexible, and always visit the station that happens to have the lowest price that week.   I suppose that residents of a small town who always know that a particular retailer will have the best price, might have a good reason to find a good gas reward card.   The rest of us should keep our gas expenditures in perspective while searching for a flexible rewards card.

This entry was posted on Thursday, October 9th, 2008 at 11:55 pm and is filed under News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.