2021 gas card survey: As fuel prices rise, gas card discounts lose their value

If you drive a lot, a gas credit card could be just your ticket to save money at the pump, build your credit and even reap rewards with some cards.

But with fuel prices rising, the discounts offered by gas station credit cards could be less valuable to you than they were in the past. And many offer limited flexibility, particularly in relation to general-purpose credit cards that reward gas purchases.

Here are some other major findings from our 2021 gas card survey:

• APRs are up from 2018: The average APR of the cards we surveyed this year was 25.3%, compared to 23.61% in 2018. The average APR for all cards is 16.15% as of April 7, 2021.
• The most popular perk is money off per gallon: Twenty-one of the 26 cards offer cents off per gallon, ranging from 3 cents to 10 cents, with an average of 6 cents off. Cards from Clark Crown and Gulf offer cash back (1.5% and 3%, respectively) and Speedway offers points that equal approximately 4% to 5% off – but you can redeem those points only at Speedway stores or for Speedway online gift cards.
• Intro offers are on the rise: Eighteen of the 26 cards have an introductory gas discount compared with 12 in 2018. Thirteen of the offers give an additional cents off per gallon, five offer a cash bonus after meeting a spending requirement and eight don’t offer an intro bonus.
• Co-branded cards are good for all purchases: Eight of the 26 cards (from BP, Chevron-Texaco, Gulf, Sheetz, Clark Crown, Meijer, Speedway and Shell) are co-branded with Visa or Mastercard, which means you can use them for non-gas purchases at various merchants.
• Gas prices have gone up: The current national average per gallon is $2.86 (versus $2.66 in 2018), with California’s $3.94 per-gallon average (up from $3.52 in 2018) leading the nation. And gas prices have rebounded since the start of the pandemic – the national average one year ago was $1.85 per gallon.

In our latest survey, CreditCards.com found that of 28 cards in our 2018 survey, seven are no longer offered, but five new cards are on the market, for a total of 26 cards. See survey methodology.

As gas prices rise, discounts are less rewarding

Among all 21 cards that offer per-gallon discounts, the average amount is 6 cents. That kind of discount loses value the more that gas costs.

And gas prices have been rising: According to AAA, the national average is currently $2.86 per gallon of regular unleaded gas, up from $2.66 in 2018 and $1.85 a year ago. A 6 cents-per-gallon discount from $2.86 amounts to 2%; at 2018’s average price of $2.66, 6 cents off is 2.3%.

If you did the same math with gas prices from just a year ago when Americans were driving much less due to lockdowns and quarantine, it would paint a better picture: 6 cents off $1.85 is 3.2%.

Many expect the gas-price trend to continue as the economy improves. Gas prices typically increase in the spring and summer anyway, which could be especially true this year as vaccine availability expands and economic activity increases.

Simon Zhen, senior research analyst for MyBankTracker.com, said it’s important that consumers consider the effective percentage savings when compared to general-purpose credit cards that offer bonus cash back rates on gas.

Compared with general-purpose cards that offer 2% or 3% cash back on gas, you may not be getting a better deal, especially if you live in a state with above-average gas prices. For instance, if you live in California, a gas card with a 6 cents-per-gallon discount would only provide you with 1.5% off as you fill up.

Zhen said that as vaccines become more available and Americans drive more again, gas card issuers will likely try to entice consumers with attractive introductory offers. During the pandemic, some of the biggest general-purpose credit card issuers tweaked their rewards programs to include bonus rates for gas purchases.

“In an increasingly competitive market for space on consumers’ wallets, some branded gas cards seem inferior to the cards with more flexible bonus rewards opportunities,” Zhen said.

See related: How the COVID pandemic has changed credit cards

A gas card can help you build credit

Rod Griffin, senior director of consumer education and advocacy for Experian, said that for those who are new to credit or have limited credit histories, a gas card can be a helpful way to start building a traditional credit history.

And because the majority of gas cards are specific to one supplier or brand of gasoline and are limited in how they can be used, they may be easier to qualify for than other types of credit cards.

It’s important to remember that credit can be a financial tool, but debt is a financial problem. The same principle applies to gas cards.

If you apply for a gas card and use it to make regular gas purchases, make sure you have a plan for paying the balance off. If you carry a balance month to month, you will have to pay interest on the amount you borrowed. Whenever possible, it’s best to pay your balance off in full each month.

Gas cards, however, are less plentiful and could become less available, Zhen said. A good alternative may be a secured credit card from your bank or credit union, he suggested.

Secured credit card accounts can typically be used for any type of purchase, and they help build your credit history. And your bank or credit union may convert your secured card to a traditional, non-secured card after a consistent track record of on-time payments.

The common factor for both is that they are a starting point to help you establish a credit report and build a positive credit history, laying the foundation for a stronger financial future.

Should you get a general-purpose card instead of a gas card?

Some gas cards have introductory offers with elevated per-gallon discounts, but they tend to be short-lived. Of the 13 cards that give you money off on gas as an introductory offer, six offer it for just one month or less (ranging from 15 cents per gallon to 50 cents per gallon), two offer it for two months (10 and 30 cents off), four offer it for three months (from 10 to 30 cents off) and one offers it for the first five purchases in three months.

Ted Rossman, senior industry analyst at CreditCards.com, noted that unless you’re going to do a ton of driving in the first few months, those bonuses aren’t going to help you much.

“My blanket advice is that most people are probably better off with a general-purpose credit card,” Rossman said.

Some gas station credit cards are co-branded with major payment networks. Of the eight cards you can use as a general-purpose card:

• Two offer additional cents off per gallon if you spend a designated amount elsewhere in that month.
• Two offer 1% cash back elsewhere.
• Two offer 3% to 5% cash back on non-gas purchases at the store or station, plus 1% cash back elsewhere.
• One offers $10 back on every $750 you spend at other merchants.
• One offers points back at the station and elsewhere, but you can redeem points only at the station or for their online gift cards.

But if you spend a lot on gas, you may be better served to apply for a card like the Blue Cash Preferred® Card from American Express, which gives 3% cash back at U.S. gas stations along with other benefits like 6% cash back at U.S. supermarkets (up to $6,000 in annual spending, then it’s 1%) and on select U.S. streaming services. The card has a $0 introductory annual fee for the first year, then $95.

The PenFed Platinum Rewards Visa Signature® Card, the Costco Anywhere Visa® Card by Citi and the Citi Premier® Card are other good examples of cards with solid gas rewards as well as lucrative benefits in other categories.

Rossman said he uses Google Pay to get 10 cents off per gallon at a variety of gas stations (and he can use any credit card for that). In addition, many gas brands have their own apps that offer 5 or 10 cents off per gallon, and you don’t need to have a specific card for that, either.

Rossman also noted that many gas stations are allowed to charge more when you use a card. A resident of New York City, he said many stations in his area charge 10 cents more when you use a card rather than cash.

He often combines Google Pay with a rewards credit card to get a better price than cash, but some people might prefer to use cash. Another workaround is to use a credit card to buy gas gift cards and then use those to buy the gas at the cash price.

Bottom line

Gas credit cards typically pale in comparison to the value you can get from a general purpose credit card, considering that the latter can often get you bigger rewards, lower interest rates and sign-up bonuses.

Survey methodology

The 2021 Gas Card Survey of 26 U.S. credit cards was conducted from March 15-19, 2021, by CreditCards.com. The 26-card survey pool represents all of the gas station-branded credit cards we were able to identify this year. Details on each card were gathered from the cards’ terms and conditions documents, any publicly available cardholder agreements and phone calls to issuers.

Since our 2018 survey, five new cards have become available: the Meijer Credit Card, Sheetz Personal Credit Card, Cenex Consumer Card, Shell Fuel Rewards Mastercard and Shell Fuel Rewards Card.

The cards that are no longer available include the Chevron and Texaco Techron Advantage Premium Credit Cards, Marathon Credit Card, Marathon Visa Credit Card, Murphy USA Platinum Edition Visa Card, QuikTrip Credit Card, Shell Drive for Five and Shell Platinum Select Mastercard.