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Pumped up: Best credit cards for gas purchases

By , CardRatings contributor
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According to data collected by the U.S. Energy Information Administration, the typical American household spends close to $3,000 each year on gasoline. That's just under 4 percent of the average pretax household income. Fortunately, with the right gas rewards credit card, you can earn some of that back each year in rebates or statement credits.

Retail-branded gas cards rarely land on "best-of" lists. While accessible to consumers with fair to average credit, these cards often provide modest rewards in exchange for brand loyalty. However, those bonus points and cents-off rebates can often end up costing you more than you might expect. You might have to burn extra gas, driving out of your way to reach a participating retailer. Using a branded card also rules out saving money at warehouse clubs or independent gas stations that charge less per gallon.

Instead, hunt for the credit card that best suits your needs. For the past few decades, credit card issuers have sounded the call for "universal acceptance," the ability for consumers to swipe their cards at any kind of retail establishment, for just about any kind of purchase. When merchants accept cards instead of cash, they give up as much as 4 percent of each purchase as transaction fees, not to mention the cost of hardware and software to process each sale.

Banks and credit unions give up some of that revenue in the form of rebates and rewards to their highest-spending customers. They're convinced that you'd rather fill your tank at a competing station than pay "full price" for gas. That pressure forces more gas stations to provide pay-at-the-pump card readers, despite their preference for cash. With more retailers hiking margins to account for processing fees, a strong gas rebate card ensures that you're paying a fair price without having to hit the ATM. These cards may appeal to potential customers for a variety of reasons not only for their gas rewards but their other features as well.

PenFed Platinum Cash Rewards Visa® Card

This card's standard, 3 percent rebate on gas purchases paid at the pump would ordinarily knock it to the front of the pack among gas cards. However, cardholders with a qualifying PenFed product can qualify for a 5 percent rebate by maintaining an active checking account with direct deposit ($250 minimum), or by keeping one of seven other common consumer accounts with PenFed. Fuel purchases for airplanes and boats do not receive cash back rewards for either version of the account. It's worth noting that credit union membership is a requirement but not a guarantee than an applicant will be approved for a credit card. With no annual fee (compared to the standard version's $25 annual fee, which is $0 for the first year, then $25) and no spending caps (on either version of this card), this card can provide one of the largest possible rebates over time among all gas reward cards.

As one of the country's fastest growing credit unions, PenFed offers a strong alternative to big banks for members who can manage basic finances without the need for branch visits. If you've got excellent credit and you're willing to bring some of your personal finance portfolio to PenFed, you can wipe out a decent chunk of your annual gasoline spending every year. Households that spend more than $500 on gas each month will get the most value from this card.

US Bank Business Edge™ Cash Rewards Card

If you own a business, US Bank would love to recruit you for a relatively new addition to their credit card lineup. With no annual fee, free employee cards, and a 3 percent cash-back on gas net purchases, your whole team can quickly rack up some significant savings. Keep the card in good standing over time, and US Bank will even give you a 25 percent annual bonus based on your prior year's Cash Rewards, up to $250. This card also offers 3 percent cash back on cellular and office supply store net purchases and 1 percent back on other net purchases.

BankAmericard Cash Rewards™ credit card

This Visa Signature card, which charges no annual fee, packs plenty of benefits, especially if you conduct your everyday banking at Bank of America. Cardholders get 2 percent cash back at grocery stores and 3 percent cash back on gas for the first $1,500 in combined grocery store and gas purchases each quarter. While that's not as big of a reward as other cards on this list, Bank of America offers new customers an online-exclusive $100 cash rewards bonus after spending at least $500 on purchases in the first 90 days of account opening. An embedded EMV chip is useful for those extended road trips.

Blue Cash Preferred® Card from American Express

This credit card from American Express offers a consistent, 3 percent cash back at U.S. gas stations throughout the year. That's in addition to 3 percent cash back at select U.S. department stores and 6 percent cash back at U.S. supermarkets on up to $6,000 per year in purchases (and 1 percent after that) and 1 percent cash back on other purchases. Terms and limitations apply. If your household spends more than $210 on gas each month, you'll break even on the $75 annual fee. Cash back is received in the form of Rewards Dollars that can be redeemed as a statement credit. Terms and limitations apply.

Chase Freedom® - $200 Bonus

While Chase's flagship cash back card may seem like an unconventional choice for our list of gas rewards cards, pay-at-the-pump purchases tend to show up on the Chase Freedom quarterly bonus calendar once or twice each year. When gas is a promotional category, activate the extra bonus online before the deadline, and you'll get 5 percent cash back on eligible gas purchases during that three-month promotional period. Chase allots those bonus rewards on up to $1,500 in combined purchases per quarter. New customers can often qualify for sign-up bonuses -- currently for a limited time it's a $200 bonus after spending $500 on purchases within the first three months of opening your account.

Chevron and Texaco Visa Credit Card

Although many retail-branded gas cards make big promises, their rebate programs usually mean burning extra gas to reach a participating station or paying more per gallon than a nearby competitor. However, this no-annual-fee Visa card from Synchrony Bank stands out as a strong value for consumers with either a Chevron or Texaco station on their normal commutes. Spend just $1,000 in monthly qualifying purchases on this card and you'll earn 20 cents per gallon in Fuel Credits on the following month's gas purchases. Even though this card caps rewards at $300 Fuel Credits per year, it's still a great opportunity to convert your brand loyalty into extra cash.

As with other rewards and cash-back credit cards, the options on this list tend to carry higher-than-average APRs. Cardholders also run the risk of forfeiting rewards and rebates after missing minimum monthly rebates. Therefore, gas credit cards make the most sense for households that can afford to pay balances in full at the end of each statement cycle.

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