Credit.com: 5 credit cards that can ease the pain at the gas pump

This post was originally published on this site

With gas prices higher than they’ve been in three years, commuting is more expensive than ever. As gas prices rise, so do commuters’ frustrations—every visit to the gas station met by an exasperated eye roll at the gas prices and a reluctant surrender of your money.

Price a gallon continues to creep higher and higher, with the average price for regular-grade gasoline hitting $3.00 in the U.S. mid-May. According to Spokesman, gas prices have climbed 41 cents in the last three months alone. Trilby Lundberg, gas industry expert, claims the rising numbers are due to an increase in crude oil prices and the implementation of “summer-grade gasoline,” which is meant to reduce smog and is, therefore, more expensive.

If you’re going to spend significant money on gas, you might as well earn points and rewards to put toward your commute, car repairs, or other expenses. Gas credit cards allow you to earn money by spending money.

Before you continue, here is a credit card tip to consider: if you are able to, always pay your credit card balance in full at the end of every month. If this isn’t something you think you’ll be able to do, select a credit card that has a low annual percentage rate (APR). Paying off your balance every month before the due date ensures you don’t pay interest on your purchases. And if you plan on leaving a balance on your credit card, you are going to want a low APR.

Here is a breakdown of the top five credit cards you can use for your commute:

Costco Anywhere Visa Card by Citi

If you have a Costco COST, -2.82%   card, the Costco Anywhere Visa Card by Citi is a great gas credit card option. You earn 4% cash back on eligible gas (any gas stations except for other wholesalers) for the first $7,000 a year, one of the best offers among credit cards. However, once you hit the max, you only get 1% cash back, so if you plan to spend more than $7,000 a year on gas, you may want to get a credit card with no gas rewards limit. Costco also has some of the lowest gas prices a gallon, which gives you more savings for your commute.

Another benefit to note about the Costco Anywhere credit card is the additional savings you get by shopping at the Costco store. That’s more money saved that you can put toward your commute costs. Most other credit cards don’t have this additional perk.

With this card, you also earn 3% cash back on restaurants and eligible travel purchases and 2% cash back on all other purchases from Costco and Costco.com year-round. There is no annual fee, and the APR is a 16.99% (variable). The card does require an excellent credit score, so factor this in when choosing a credit card.

Highlights:

  • 4% cash back on eligible gas for the first $7,000 a year and then 1% thereafter
  • 3% cash back on restaurants and eligible travel purchases
  • 2% cash back on all other purchases from Costco and Costco.com
  • 1% cash back on all other purchases

Drawbacks:

  • You have to have a Costco membership, which ranges from $55 to $120 a year depending on your membership choice
  • Requires excellent credit
  • A $7,000 gas rewards limit can be a drawback if you spend more than that on gas each year
Discover it Chrome

The Discover it Chrome is a great credit card if you spend a lot of money on gas. Cardholders will receive 2% cash back in up to $1,000 each quarter on gas and restaurant purchases, along with 1% cash back on all other purchases. This is pretty generous for a card that has no annual fee, but if you spend more than $1,000 on gas each quarter, then you may want to look into getting another credit card.

Another thing the Discover it Chrome card offers new cardholders is that at the end of the first year, Discover matches all cash back earned. This means if you earn $300 in cash back in the end of the first year, you’ll actually earn $600, making the savings on your commute even better.

Other features of the Discover it Chrome card include free social security number alerts if, a free credit scorecard with your FICO credit score, and 100% U.S.-based customer service. Cash back can be redeemed in any amount at any time. It comes with a 0% for 14 months on purchases on purchases and balance transfers followed by a 13.74% – 24.74% Variable on purchases & balance transfers.

Highlights:

  • Intro offer: Discover will match all the cash back earned at the end of your first year, automatically.
  • Earn 2% cash back at gas stations and restaurants on up to $1,000 in combined purchases each quarter, automatically. Plus, earn unlimited 1% cash back on all other purchases – automatically.
  • Redeem your cash back for any amount, any time. Cash rewards never expire.
  • 100% U.S.-based customer service.
  • Get a free credit scorecard with your FICO credit score, number of recent inquiries and more.
  • Receive free Social Security number alerts—Discover will monitor thousands of risky websites when you sign up.
  • No annual fee.

Drawbacks:

  • 2% cash back is capped on spending $1,000 a quarter
  • Discover only matches your cash back in the first year
Chase Freedom

The Chase Freedom card is a credit card you can use for a lot more than just gas. It has rotating bonus categories each quarter throughout the year that focus on rewards in various categories, such as gas and everyday travel, restaurant and dining, grocery store purchases, etc. When the bonus category is active, you receive 5% cash back on up to $1,500. Although this may be a downside if you only want the gas rewards, it can be beneficial if you would enjoy different rewards throughout the year. However, note that you have to activate the bonus categories each quarter and forgetting to do so will forfeit your rewards.

Because there are rotating bonus categories, this type of card is better if you are more of a seasonal driver since you can’t have unlimited cash back on gas. If you constantly cap out your spending during the gas bonus quarter, you will earn 1% cash back in a year, which is the average among other gas reward credit cards.

Chase Freedom also offers a $150 sign-up bonus if you spend $500 within the first three months of opening your account. This is a decent amount and you don’t have to spend as much money to receive the bonus as other credit cards require. Chase JPM, -0.77%   Freedom has a 16.74% – 25.49% Variable; however, there is an 0% for 15 months on purchases period.

Highlights:

  • 0% Intro APR for 15 months from account opening on purchases and balance transfers, then a variable APR of 16.74-25.49%. Balance transfer fee is 5% of the amount transferred, $5 minimum
  • Earn a $150 Bonus after you spend $500 on purchases in your first 3 months from account opening
  • Earn 5% cash back on up to $1,500 in combined purchases in bonus categories each quarter you activate
  • Get new 5% categories each quarter
  • Unlimited 1% cash back on all other purchases – it’s automatic
  • Cash Back rewards do not expire as long as your account is open and there is no minimum to redeem for cash back.
  • Free credit score, updated weekly
  • No annual fee

Drawback:

  • You have to activate each bonus category or you don’t qualify for bonus rewards
Citi Thankyou Premier Card

Rather than managing rewards by percentages, The Citi Thankyou Premier card uses “Thankyou points.” Citi Thankyou starts you off with a generous 50,000 bonus point bundle if you spend $4,000 within the first 90 days of opening your account. You can redeem the points for $625 in airfare on any airline any time throughout the year if you book through ThankYou Travel Center. Or, you can cash the points in for a $500 gift card redeemed through ThankYou Rewards collection.

Read: Don’t ever do this with your credit card

Citi Thankyou does have an annual fee of $95, but it is waived for the first 12 months. The APR is relatively normal compared with other credit cards, ranging from 16.24% – 25.24% (variable), but the card does require excellent credit. The card offers bonus points for gas and everyday travel purchases as well as all other purchases. You earn triple bonus points for everyday travel purchases, such as gas, public transportation, tolls, taxis, parking, etc. For dining and entertainment, you receive double bonus points. And for all other purchases not in these categories, you get regular points. There is also no expiration or limit to your earned points.

Highlights:

  • Earn 50,000 bonus ThankYou points after you spend $4,000 in purchases within the first three months of account opening
  • Earn 3X points on travel, Including gas stations
  • Earn 2X points on dining out and entertainment
  • Earn 1X points on all other purchases
  • 50,000 Points are redeemable for $625 in airfare on any airline, anytime with no blackout dates when booked through the ThankYou Travel Center, or $500 in gift cards when redeemed at thankyou.com
  • No expiration and no limit to the amount of points you can earn with this card
  • Points transfer allows you to transfer points to participating airline loyalty programs
  • No foreign transaction fees on purchases

Drawbacks:

  • Annual fee after the first year
  • Requires excellent credit
Blue Cash Preferred from American Express

The Blue Cash Preferred card from American Express is a reasonable choice for a gas credit card, offering 3% cash back year round at U.S. gas stations. Having no limit enables you to have ample savings on your everyday travels without difficulty. Blue Cash Preferred also offers 6% cash back at U.S. supermarkets up to $6,000 every year. Dividing that amount up leaves you with rewards on $500 a month.

Blue Cash Preferred does have an annual fee of $95, but there is a $200 statement credit as a welcome offer if you spend $1,000 within the first 3 months of opening your account. You also earn 1% cash back on all other purchases. The APR is even with other credit cards ranging from 14.74%-25.74% Variable.

See: Wait! Don’t destroy those old credit cards yet

If you are considering this credit card but don’t want to pay the annual fee, there is a Blue Cash Everyday Card from American Express. AXP, +0.20%   This card has no annual fee but lower rewards ($150 welcome offer, 3% cash back at U.S. supermarkets on up to $6,000 a year, 2% cash back at U.S. gas stations, and 1% on all other purchases).

Highlights:

  • $150 statement credit after you spend $1,000 in purchases on your new card within the first three months.
  • 3% cash back at U.S. supermarkets (on up to $6,000 a year in purchases, then 1%).
  • 2% cash back at U.S. gas stations and at select U.S. department stores, 1% back on other purchases.
  • Low intro APR: 0% for 15 months on purchases and balance transfers, then a variable rate, currently 14.74% to 25.74%.
  • Over 1.5 million more places in the U.S. started accepting American Express Cards in 2017.
  • Cash back is received in the form of reward dollars that can be redeemed for statement credits, gift cards, and merchandise.
  • No annual fee.

Drawback:

  • Annual fee of $95

Also read: Credit cards aren’t the only way to earn cash back and points

These are just some credit cards that allow you to earn savings and rewards for your commute as well as a variety of other purchases. Because there are specialized credit cards for numerous purchase categories, using different credit cards allows you to take advantage of all the rewards they have to offer. For example, if you own a business and are trying to increase your business growth, consider looking into a business credit card. People often forget about the rewards they can accumulate by using a specific credit card for their various purchase types. Using credit cards for purchases such as gas, business, travel, and many others will allow you to earn significant rewards. Why not make money when you spend money?

If you want to make sure your credit can handle a new credit card, you can check your three credit reports free once a year.

This article originally appeared on Credit.com.

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