Although electric cars are on the rise, the majority of us car owners are still pumping gasoline into our vehicles and it continues to be a big line item in our monthly budgets.
We've been fortunate in recent years that prices have dipped under $1 per litre ... but prices have been steadily creeping up again even with the cost of crude oil being BELOW what it cost in 1974. That won't last forever!
Credit cards are one tool that can be used to get a sizeable discount on those gas purchases because many cards offer bonuses specifically aimed at gas purchases.
Here are the cards that will help keep your wallet happy:
American Express Gold Rewards Card (6.0% Return)
If you transfer your American Express Membership Rewards points 1:1 to either Aeroplan or Avios miles and redeem them for flights, you can expect up to a 6% return on spending for gas purchases.
Because Aeroplan miles are worth about 3 cents each. And this card gives you double points on gas purchases. Most other cards don't come close to a 3 cent point value, and if they do, they only give you 1 or 1.5 points per dollar spend instead of 2 like this card does.
It isn't cash, but a 6% return on spending is hard to ignore and the 25,000 points sign up bonus worth about $750 doesn't hurt either!
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.
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 more than makes up for the annual fee difference.
If you prefer CIBC over Scotiabank, they offer a very similar cash back card that also gives you 4% cash back on gas.
TD Aeroplan Visa Infinite (4.5% Return)
The TD Aeroplan Visa Infinite card has a 50% bonus on gas purchases meaning you'll earn 1.5 Aeroplan miles for every dollar you spend on the card. Following the same calculation I did with the American Express Gold Rewards Card, that works out to a 4.5% discount.
This same bonus applies to the Privilege edition of this card, but the annual fee is much higher at $399. CIBC also offers an Aeroplan Infinite credit card that is nearly identical.
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.
Scotiabank Gold American Express (4% Return)
Scotiabank's American Express cards are the only flexible travel cards that offer 4x points on gas purchases. That means you'll get a 4% return on your spending that you can use to pay for any travel purchase booked using the Scotia Rewards Travel Service at the same prices you'd get anywhere else.
It's also one of the few cards that gives you 4x points on dining and entertainment purchases as well as grocery stores. It comes with a sign up bonus that is worth a minimum of $200 in travel too.
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.
PC Financial World Elite MasterCard (~3% Return)
The PC Financial World Elite card is a bit different because it gives you an equivalent of a 3 cents per litre discount on gas purchases at Esso gas stations. The discount is rewarded as PC Points that can be redeemed for groceries and other merchandise at any Loblaws owned store where you can collect PC Points.
Right now 3 cents per litre is equal to roughly a 3% return, but it fluctuates slightly with the price of gas. The other advantage to this card is that in the western provinces, there are often additional gas discounts at PC affiliated gas stations up to 10 cents per litre but it varies by location.
There are also the regular and World editions of this card to consider, but they only give a 2 cents per litre discount, instead of the 3 offered by the World Elite.
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)
You get 2% cash back on gas purchases with this card. Sounds great until you realize that there is a $400 monthly combined cap on your gas and grocery spending after which your 2% bonus cash back rate drops to 1%. Most families will blow through that limit in no time mean your return will be somewhere between 1 and 2% on gas - not great.
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 $1.10/L) that's an 9.1% 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 $63.63 on gas which we already know works out 9.1% of your gas spending. However, that's only 3.2% 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 $36.36 on $3000, which works out to a 1.21% 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.
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.
Tangerine Money-Back MasterCard (2% Return)
The Tangerine Money-Back MasterCard allows YOU to choose up to 3 bonus spending categories where you can earn 2% cash back instead of the usual 0.5%. You are free to choose gas as one of your categories to boost it up to that 2% rate.
Another interesting feature of the card is that your bonus spending categories are not locked in. You can change them as your spending habits change to make sure you are always maximizing your bonus cash.
Capital One Platinum MasterCard for Costco Members (2% Return)
The Capital One Platinum MasterCard exclusively for Costco members is 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.
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.
SimplyCash Card from American Express (1.25-5% Return)
The SimplyCash Cards from American Express doesn't have an ongoing bonus for gas purchases. But, it does give you 5% back for filling your tank during the first 6 months of card ownership. 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. After your bonus runs out, you'll be earning 1.25% cash back on gas and all your other purchases. Honestly, this card is worth it for the bonus alone.
American Express Air Miles Platinum Credit Card (1.05% 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 10.5 cents.
With that valuation, it works out to a 1.05% return on spending.
BMO Air Miles MasterCard (0.66%-0.88% 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 0.88% and the regular edition is 0.66%. 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?
My go to card for gas purchases is the American Express Gold Rewards Card so I can transfer my points to Aeroplan in the hopes of achieving a 6% return or more. With the coming changes to Aeroplan in 2020 though, I am going to be keeping them as Membership Rewards points and possibly converting them to Avios or Starpoints instead.
What about you? Which card will you use?