Customers turn to gas credit cards to pump up pocketbooks

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by Janet Roach

WVEC.com

Posted on March 14, 2012 at 3:59 PM

Updated Thursday, Oct 17 at 2:45 PM

NORFOLK -- JoAnn Gibson's pit pass takes a bit of the sting off the high cost of gas. Every time she fills up, she qualifies for a free reward. 

"It makes sense to use the perk pass because I get free coffee, free soda or candy bar and I'm hoping to get a free car wash today," says Gibson.

It makes the nearly $4.00 a gallon price easier to bear.

She may be on to something. According to Virginia-based credit card watchdog group Card Hub.com, softening the financial blow of gas prices could lie with the right credit card. Many offer cash rebates on gas purchases. Card Hub founder Odysseas Papadimitriou says everyone should be getting at least five percent back.

“It can save you a couple of hundred dollars a year. As gas prices go up, you will save more by having one of these cards, " he says.

His company examined a thousand credit card offers to find the most gas-friendly ones. At the top of list is the Pentagon Federal Credit Union Platinum Cash Rewards credit card. It offers five percent cash back on gas purchases at any gas station. There is no annual fee, but it does require a $15.00 PenFed membership.

The Blue Cash everyday card from American Express also got high marks. It offers two percent cash back at gas stations and department stores and three percent at supermarkets. You also get a $100 bonus for spending $1000 in the first three months.

Papadimitriou likes these cards because you get the rewards no matter where you buy your gas.

"Rewards earning rates that high are typically only seen on station-affiliated cards," he notes.

He cautions that station-affiliated cards are not always a good idea because you're tied to the stations of one company. He suggests only opening one if you're already loyal to a particular brand.

His company's investigation gave the BP credit card good marks. It offers 10 percent rebates on BP gas for the first 60 days after an account enrollment. Thereafter, the rebates drop to five percent ExxonMobil's MasterCard provides a 15-cent rebate for each gallon of ExxonMobil gas a customer buys and gives two percent back on other purchases up to $10,000 in annual spending.

Many station-affiliated cards have discount limitations. For instance, according to Card Hub, a Shell credit card has rebates that don't kick in until you have at least $500 in overall charges in a month. Purchases between $500 and $999 will get ten cents per gallon off on the Shell gas they buy the next month. That card made Card Hub's worst gas cards list.

“Shell is simply being unreasonable with the amount they require people to spend in order to garner some decent savings," says Papadimitriou.

While credit cards can be a source of good savings, watch out for fees and limits. Creditcards.com says you have to factor in transaction fees when using credit and debit cards and make sure you know if there’s a monetary limit per transaction. If so, the pump could cut off before you’re filled up and starting another transaction could create a second transaction fee.

Creditcards.com has these tips for gas consumers:
Watch your credit card bill for specials. About 75% of the cards Americans carry are rewards cards, and many of them run monthly or quarterly specials that are announced online and in billing statements.
Sign up for a supermarket loyalty card. About 5,000 gas stations accept supermarket loyalty cards for discounts on gas; several supermarket chains also have gas stations at their stores. The savings can be as much as 30 cents per gallon.

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