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Gas Category Bonuses
Readers often ask what the best cards are for gas purchases.
I prefer to keep it simple and:
- Use the Chase Freedom Visa whenever gas is in their 5% quarterly category
- Use the Chase Ink Bold or Chase Ink Plus for most other times
Mostly I use whichever card for which I have to complete a minimum spending requirement. I would much rather have a high-sign up bonus on a new card rather than earn a few extra miles and points on an existing card. But not everyone is like me.
I also don’t think it is worth the effort of chasing after gas category bonuses if you are only going to get 1 or 2 more points per $1. Because it usually isn’t going to add up to much. That’s why I try to max out the Chase Freedom 5% category bonuses, but don’t worry if Emily didn’t use her Ink Bold for gas (which earns only 2 points per $1 on gas)!
For example, we spend ~$150 a month on gas or $1,800 a year. One extra mile or point per $1 spent is only 1,800 extra points per year. But 4 extra points per $1 (with the Chase Freedom) is 7,200 points per year.
I’m willing to give up 1,800 points to make it less stressful for Emily, but I’ll go out of my way to get the 7,200 extra points!
But you have to decide if it is worth it to YOU to chase after gas category bonuses depending on how much you spend on gas and your comfort with sorting through credit cards at the pump.
The Best Cards for Buying Gas
I like the Penfed and Chase Freedom because they both have no annual fee which means that you can keep them for a very long time and help build your credit score.
I like the Chase Ink Bold and Ink Plus because even though they earn only 2 Ultimate Rewards points per $1 spent on gas, you also get 5 Ultimate Rewards points for Office Supply and Telecom (Cable/Internet etc.) purchases. So the Ink Bold and Ink Plus could be worth it even with the $95 annual fee.
In contrast, the American Express Premier Rewards Gold (which also earns 2 Membership Rewards points per $1 on gas) has higher annual fee of $175, charges a foreign transaction fee, and has category bonuses (3 points on air fare and 2 points on groceries) which aren’t as lucrative to me as the Ink Bold or Plus.
1. Penfed Cash Rewards
The Penfed Cash Rewards card doesn’t earn me an affiliate commission, but is by far the best card for buying gas, if you like cash-back rewards. You get 5% cash back per $1 spent on gas. There is a $50,000 limit per year, but hopefully you spend nowhere near that amount on gas.
The card also has no-annual fee and no foreign transaction fee as well!
I don’t have this card and I likely won’t get it, because I prefer my miles and points to cash back and I prefer to not add a 17th card in my wallet.
But for those who like to maximize every dollar spent, it is hard to argue with a card which has NO annual fee and foreign transaction fee and which gets you 5% cash-back on gas!
2. Chase Freedom
The Chase Freedom Visa usually has gas in one or two of the quarterly categories which earn 5% cash back.
But you are limited to only $1,500 a quarter.
The Chase Freedom is a fee-free card, so it is a good Chase card to keep for a long time. You can either redeem the points earned for cash back (5% cash back isn’t too shabby and some folks prefer cash back). Or you can transfer the Ultimate Rewards points to the Chase Sapphire Preferred, Chase Ink Bold, Chase Ink Plus or the JP Morgan Select card and from there to airline or hotel partners such as Hyatt or United.
You have to activate each quarter’s category bonuses before the quarter to earn the 5X extra points. The card has no annual fee.
3. Chase Ink
The Chase Ink Bold & Chase Ink Plus earn 2 Ultimate Rewards points per $1 spent on gas (up to $50,000 a card member year). We like Chase Ultimate Rewards because you can transfer their points to United, Southwest, British Airways, and Hyatt almost instantly and in a 1:1 ratio.
Emily and I both have Ink Plus and Ink Bold cards, so it is easy for us to use our existing Ink Cards for gas. We prefer keeping it (somewhat) simple and don’t want to have a separate card for gas especially when we don’t buy a lot of gas.
We also use the Ink cards to earn 5X Ultimate Rewards points at Office Supply stores and set up automatic payments for internet and cellphones.
But the Ink Bold and Ink Plus have annual fees of $95 which is waived for the 1st year, so this may not be the best card to keep in the 2nd year ONLY for gas purchases.
If you already have a Chase Sapphire Preferred and don’t want another card with an annual fee, you could get the no-fee Ink Cash & Ink Classic and transfer Ultimate Rewards points form the Ink Cash & Classic to the Sapphire Preferred and from there to airlines and hotels.
The Best of the rest
1. American Express Mercedes Benz Card
You earn 3 American Express Membership Rewards points per $1 spent on gas with the Mercedes Benz card (not Platinum version), as long as your total gas purchase is less than $400 per transaction. But the card has a $95 annual fee and a low sign-up bonus, so it isn’t worth it unless you spend a LOT on gas.
2. American Express Premier Rewards Gold
I wouldn’t go out of my way to get this card with the current 25,000 point bonus. Instead, I’d wait for the 50,000 point offer to return.
If you already have the card, it could be worth the 2 Membership Rewards points per $1 on gas. But you’d have to spend a LOT on gas to justify the $175 annual fee, so I wouldn’t keep this beyond the first year.
That said, you do get 15,000 bonus points for spending $30,000 in 1 calendar year, so it could be worth it if you are a Big Spender. Or if you spend heavily on air fare which earns 3X points or groceries which earns 2X points, but not otherwise.
3. Costco True Earnings
The business Costco True Earnings business card earns 4% cash back on gas purchases in the US (up to $7,000 a year). But you need a paid Costco Membership (~$55), so this card is helpful only if you have a Costco membership.
On the other hand, the Penfed Platinum gets you 5% cash back on gas (up to $50,000) a month and has NO annual fee.
It is tempting to chase after gas category bonuses.
But I’d make sure to use a card which doesn’t have an annual fee (like the Penfed or Chase Freedom).
If you do pay an annual fee for a card which earns a bonus for gas, do the math to see that paying an annual fee (after the sometimes free first year) makes sense for you.