Last week I told you all the ways you can save money on gas that don't involve buying a Tesla or a Smart car. This week I'm going to fill you in on which credit cards give you the best discounts when you buy gas.
This is a great way to ease the heavy burden of going to the pumps these days as prices continue to rise. Can the days of 50 cent gas come back please? Is ANYONE listening??
There's a better chance of the Leafs winning the Stanley Cup than that happening. Even I know that and I don't watch hockey! So you might as well get the best possible card for gas discounts rather than waiting around for prices to fall.
Here are the cards that will help keep your wallet happy:
American Express Gold Rewards Card (5.8% Return)
If you're into collecting Aeroplan miles, this is the best card currently available in terms of overall value. It shines in the gas bonus department as well because it gives you fully double the reward points you would normally earn on gas purchases. That's much better than the 50% bonus or no bonus that most other travel rewards cards offer.
If you read my guide to Aeroplan (link above), you'll see that I value Aeroplan miles at about 2.8 cents each. If you double that because you're earning two per dollar spent at the pumps, then this becomes a 5.8% return on spending. It isn't cash, but that's definitely an attractive return!
Scotia Momentum Visa Infinite (4% Return)
This is one of the best cash back cards in Canada for many reasons - one of the biggest being that it gives you 4% cash back on gas. There is a cap on how much you can earn in a given year, but who spends $25,000 a year on gas anyway? You'd have to run a trucking company or own a super yacht for that! It comes with a $99 annual fee, but for a limited time they are currently waiving the fee for the first year!
There is also the Scotia Momentum Visa ($39 fee - 2% on gas) and Scotia Momentum No Fee Visa (1% on gas) cards that have lower annual fees and lower rewards, but they both still offer a bonus for gas purchases. As long as you have a decent amount of spending, then the Infinite card typically makes the most sense after you do the math.
CIBC Aerogold Visa Infinite (4.2% Return)
The Aerogold cards give you a 50% bonus on your Aeroplan miles earned when purchasing gas. This means you get 1.5 miles per dollar spent instead of the usual 1. Following the same calculation I did with the American Express Gold Rewards Card, that works out to a 4.2% discount.
This same bonus applies to the Privilege edition of this card, but the annual fee is much higher at $399.
I'm ranking the Scotia Momentum Visa Infinite above this card simply because cash is so much better than Aeroplan miles even if it is a slightly worse return on spending.
CIBC Aventura Visa Infinite (3.4% Return)
The Aventura Rewards system is a bit hard to figure out. Assuming you are going to redeem your points for air travel (the best value) we can approximate the value of points by saying that 35,000 points is worth $800. That's what a long haul flight in North America will probably cost you. This is assuming your flight actually costs $800 or more and it doesn't cost slightly less than 35,000 points (apparently some long haul flights only cost 25,000 points). We'll assume the $800 flights all cost 35,000 to make things simple.
You get 1 point per dollar spent on the card and 1.5 points at gas stations. When calculated, that works out to a return on spending of 3.4%.
Both the Gold and Infinite versions of the card sport a $120 annual fee and the same rewards structure. The differences between them mostly lies in their fringe perks.
Petro Points CIBC MasterCard (2.9% Return)
This card gives you a straight 2¢/L discount on fuel purchased at Petro Canada stations. You also earn petro points on your everyday purchases including a 50% bonus when purchasing gas.
This seems great at first, but considering the abysmal value of petro points, it isn't all that great. Earning a straight 4% cash back, like you do with the Momentum Visa Infinite, amounts to much more savings than 2¢/litre and the 15 petro points per dollar spent on gas you get with this card. Not to mention 100% cash is always better than of a mix of a cash discount and reward points.
Say you buy 50 litres of gas at $1.30 per litre. That means you will get a discount of $1.00 and 975 petro points. The best value you can get for 1000 petro points is about 91¢. That means you saved about $1.88 on your $65 purchase. That's 2.9%.
National Bank Ultramar MasterCard (2.5% Return)
This card is worth considering as a gas-specific credit card. It doesn't offer much value in the other purchases department, but for gasoline all you have to do to reach maximum reward value is spend more than $100/mth at Ultramar and more than $2,500 at Ultramar annually. That's works out to $208 in gas per month, which should be pretty easy for a lot of people.
If you manage to maximize the rewards, then your return on spending will be 2.5%.
MBNA Smart Cash MasterCard (2-5% Return)
I've talked about this card so much you're probably sick of it, but when talking about gas I can't leave it out. It gives you 5% cash back for the first 6 months on gas purchases, which is really great, then that drops to 2% which is double the usual rate of 1% for regular purchases (not as fantastic). The 2% bonus rate drops to 1% after you spend $600 on gas and groceries within a given month so it often makes sense for couples to each get their own.
Canadian Tire Gas Advantage MasterCard (Up to 2.9%)
This card looks absolutely fantastic because you can get up to a 10¢/litre discount on all gas purchased at Canadian Tire in addition to other discounts you can get via Canadian Tire Money.
The price of gas is falling these days and the discount percentage gets larger as that happens. At today's prices for regular gas (roughly $1.20/L) that's an 8.3% discount. Holy smokes, sounds great right?
The fine print is that you have to spend a certain amount on your credit card each month to achieve the maximum reward. It's a reasonable $2000/mth - fine, we'll assume you can do that. The real problem is that you earn absolutely NO REWARDS on that $2000+ in spending. In addition, you are limited to $700 in gas at 10¢/litre off. After that your discount drops to 2¢/litre.
Say you manage to spend exactly $2000 on the card the previous month to qualify for the maximum discount, and then you manage to spend exactly $700 on gas this month so you buy all your gas at the maximum discount. Stated simply, this is the best case scenario - it could get much worse.
You'll save $58.33 on gas which we already know works out 8.3% of your gas spending. However, that's only 2.9% of your overall spending. That's still not bad, but it isn't great when you consider other credit cards that let you earn rewards on all your spending.
Say you ended up spending $3000 on the card last month and only bought $400 in gas. Now you've only saved $33.33 on $3000, which works out to a 1.11% return - drastically worse!
I'd only recommend this card for big gas spenders who are willing to juggle this card with others when they go above $2000 in spending in a given month. One perk is that this card doesn't have an annual fee and your purchases at Canadian Tire and Mark's Work Wearhouse are doubled when it comes to calculating your reward level.
Capital One Costco Platinum MasterCard (2-4% Return)
Costco recently decided to ditch American Express as their credit card partner and align themselves with Capital One. The Capital One Platinum MasterCard exclusively for Costco members is the result. It's a well rounded no-fee card that gives you a 3% rebate on restaurants, 2% on gas, and 1% on all other purchases after $3000 in calendar year spending on the card. The first $3000 only pays 0.5% on regular purchases.
For the first 3 months of card ownership, all your rewards are doubled up to $1500 in combined spending at the pumps and at restaurants during the bonus period.
The cash back is paid out to you once a year in the form of a rebate coupon that can only be redeemed at a Costco warehouse for merchandise. You have to be an active Costco member to apply for this card as well as to redeem your reward, so keep this in mind if you're thinking of applying. Fortunately, it can double as your membership card so you only have to carry one card in your wallet.
Canadian Tire Cash Advantage MasterCard (~2% Return)
This card has a tiered rewards system, which means it is frustrating to use and frustrating to do math on. For most people, they will be earning roughly 1% cash back on regular purchases, and 2% cash back at Canadian Tire (including Canadian Tire gas bars).
For spending above and beyond $24,000 annually, those numbers rise to 1.5% and 3%, but most people won't get there I don't think. I'll just take the easy route and say it's a 2% return on spending. If you only use the card to buy gas, you may have a hard time getting up to the higher earning tiers.
RBC Esso Extra Visa (1.4-4% Return)
I had this card for a while because having it allowed me to qualify for lower fees at RBC when I had my mortgage there. You get 1 Esso Extra point per dollar spent and that doubles to 2 on purchases made at Esso stations.
The best value for Esso Extra points is car washes. It costs 499 points for a roughly $10 car wash. That means each point is worth about 2 cents. Unfortunately, you can only have so many car washes. The next best value is probably the 5¢/litre discount card you can buy for 1400 points on 200 litres of gas purchased. That makes each point worth only 0.6 cents.
With these point values, you're going to get either a 4% or 1.4% return on spending.
SimplyCash Card from American Express (1.25-5% Return)
American Express just launched a couple of brand new cash back credit cards in the Canadian market. Unfortunately, they don't have an ongoing bonus for gas purchases and as such should probably be left off the list. However, for the first 6 months only, they are giving a bonus of 5% cash back for filling your tank.
This is a nice alternative to the Smart Cash if your 5% bonus ran out with them. They do have a cap on the maximum cash back you can earn at the 5% rate as well - it's $250 or $5000 in spending.
FYI, the no annual fee version of this card earns you 1.25% cash back on all purchases after the bonus period ends, while the preferred version gives you 1.5% but will set you back $79 annually.
American Express Air Miles Platinum Credit Card (1.1% Return)
This is the best Air Miles affiliated credit card right now, but it still doesn't offer amazing returns. You get 1 Air Miles for every $15 spent and 1 for every $10 spent at the pumps.
I used to value Air Miles at up to 30 cents each, but most Dream rewards with good value have been removed from their catalog so Air Miles Cash really makes the most sense now, except for potentially some air travel redemptions. Unfortunately, Air Miles air travel redemptions are too situational to be used reliably for valuation - even more so than Aeroplan miles. Therefore, each mile is worth only 11.1 cents.
With that valuation, it works out to a 1.1% return on spending.
BMO Air Miles MasterCard (0.7%-0.9% Return)
These cards give you a 25% bonus, but only at Shell locations, so you need to make sure that's convenient and cheap for you before choosing one of these. The regular card earns you 1 Air Mile per $20 spent with no fee, while the World edition gets you 1 Air Mile per $15 spent. The 25% bonus is on top of that.
That means based on the previously mentioned value of an Air Mile, the World card will give you a return of 0.9% and the regular edition is 0.7%. Pretty much a waste of time.
Canadian Tire Options MasterCard (Variable Return)
Canadian Tire has many raving fans and the Canadian Tire Options MasterCard has equally as many. It can be hard to understand why when it pays out rewards of less than 1% (even when they advertise them at 1%) in money that can only be spent at Canadian Tire. Most cash back cards will do better than that.
However, buying gas at Canadian Tire is already a pretty good deal and this card makes it easier and better:
- First, it's the only credit card that can be used directly at Canadian Tire and their gas bars that still allows you to earn Canadian Tire Money. You can get around this with another credit card by using it to buy Canadian Tire gift cards first and then using them to purchase your gas, but that's a hassle.
- Second, you always get the highest gas multiplier available automatically (no coupon required).
- Third, your Canadian Tire Money gets stored right on the card instead of having to carry the phony bills around with you. That makes for super easy collection and redemption.
- Fourth, you get exclusive offers both in-store and on gas. Sometimes there will be a higher gas multiplier exclusively for cardholders that no one else can get.
So, when you factor in all the reasons above, it can make sense to have this card just for buying gas at Canadian Tire if that is your usual spot to fill up. You'll save a lot of time and effort.
What Credit Card Do You Use When You Buy Gas?
I currently use the MBNA Smart Cash with the 5% bonus for 6 months. I recently upgraded the card to the World edition, so I was able to qualify for the bonus for an additional 6 months that way.