American ExpressAs Americans, we drive an average of 13,476 miles per year, according to Federal Highway Administration data. With gasoline now selling for a national average of $3.65 per gallon -- and the average passenger car netting about 27 miles to the gallon -- that comes to more than $1,800 a year we spend on average to fuel up and go.

No wonder banks and oil companies alike push gas cards. Anything that cuts that bill -- roughly $150 a month -- has to sound good to most consumers. Trouble is, too many of these cards carry high interest rates and other unfavorable terms.

Drive Your Way to a Discount

Every major oil refiner has its own gas card issued through a bank. CreditCards.com has a useful list of what the national station networks offer, which you can find here. Terms vary, but don't assume that all offer some form of cash back based on your fuel spending.

Consider ExxonMobil's (XOM) Personal card, which is issued and backed by Citigroup (C) yet features no rewards whatsoever. Consumers get the benefit of online account management, a point-and-go "Speedpass" wireless key to activate pumps and car washes or to pay with at the counter. You can also use the card for ATM cash advances. The price for all this? An outrageous 24.99% interest rate on purchases.

Of course, good rewards programs are out there. The trick is to know the limitations and -- as with retail cards -- to never, ever use one of these cards to carry a balance. Here's a brief list of considerations:

  • What rebates are available? (Do you drive enough for the deal to make sense?)
  • Are there limits to what you can earn? (How would you do in an average year?)
  • What's the interest rate? (How much will it cost if you slip up?)


The best gas cards combine generous rebates and industry-standard interest rates. Does American Express' (AXP) Blue Cash Preferred card measure up? That's the question before us today in this ongoing series examining the best (and worst) credit card offers out there.

3 Important Details About the Blue Cash Preferred Card

This card is one among dozens American Express offers to potential customers, so don't feel bad if you haven't yet discovered it. Here's a closer look at the benefits and bugaboos:

1. Bonuses. Similar to Amazon.com's (AMZN) Rewards Visa, the Blue Cash Preferred kicks back $150 in bonuses after the first $1,000 of spending. Refer a friend and you'll receive another $75 bonus, and $75 more for every other friend who signs up for the Blue Cash Preferred card.

2. Tiered earnings. Like most other cash back cards, Blue Cash Preferred sports tiered earnings that favor shoppers and gas-guzzlers. Grocery spending outside of warehouse clubs kicks back 6% while gas purchases return 3%. Other spending kicks back 1%. Importantly, AmEx places no limits on what you can earn.

3. Introductory interest rate and annual fee. It's not cheap to carry a Blue Cash Preferred card. Arguably the card's parent -- AmEx -- gets the biggest perk. AmEx charges a $75 fee to hold Blue Cash Preferred, while interest on balances ranges from 17.24% to 22.24% after a 0% introductory rate on purchases for the first 12 months.

American Express promises other benefits on this card, such as extended warranty protection and guaranteed returns for unwanted merchandise. But most of Blue's travel and shopping extras are about in line with what other cards offer.

This Is the Right Card for You If ...

Apply for this card if you have no debt, a family to feed, and an extended commute for work. Cash-back bonuses should add up quickly for those who spend hundreds monthly in these two categories. Over the course of a year, your $1,800 in gas spending could net you $54 in rebates.

Yet what makes this card stand out isn't how much it pays in gas rebates. Plenty of branded gas cards pay more. The difference comes at the supermarket, where the average American family spends $3,624 annually on groceries. Using the Blue Cash Preferred card for all that would kick back $217 in rebates, more than enough to compensate for the annual fee.

Regardless, it's important to remember that Amex wouldn't offer this card if it didn't produce profits. A 6% grocery rebate won't mean much if you end up paying 17.24% or more in interest payments.

What credit cards do you use? What is the best credit deal you've found? Please let us know using the comments box below.

Motley Fool contributor Tim Beyers didn't own shares in any of the companies mentioned in this article at the time of publication. Check out Tim's portfolio holdings and past columns. The Motley Fool owns shares of Citigroup and Amazon.com. Motley Fool newsletter services have recommended buying shares of Amazon.com and ExxonMobil, as well as writing a covered strangle position in American Express.







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Albert L

I think blue cash preferred is awesome. I get about 50 dollars back a month by using the following method; I buy 500 dollar visa gift cards from Ralphs Grocery and spend that visa gift card on places that Amex wouldn't offer 6% cash back.

March 09 2012 at 6:00 AM Report abuse rate up rate down Reply
Al Gray

For people who pay the bill each month, we believe there is no better credit card than the COSTCO American Express Card. No fees, and a yearly rebate of 3% on gasoline, 2% from restaurant purchases, 2% on all travel, and 1% on everything else.............even in addition to the rebate we receive from Costco.

Gasoline purchases at our local Costco are up to FIFTEEN CENTS per gallon less than surrounding stations. That alone is worth the price of the EXECUTIVE COSTCO CARD. We fill the tanks of two autos weekly and save about $5.00-$6.00 EACH WEEK on fuel costs.

This is in addition to the annual rebate from Costco! This year (annual rebates were sent out at end of February), our combined American Express and Costco rebate was nearly ONE THOUSAND DOLLARS.......tons more than the BLUE CARD would ever pay back.

March 05 2012 at 10:15 AM Report abuse rate up rate down Reply
DaltonCooper

There is an error here on the American Express Card. I receive the rebate of 5% on each of the following, after spending $6000.00, on groceries, drugs and gas.

March 01 2012 at 11:23 AM Report abuse rate up rate down Reply
DaltonCooper

There is an error here on the American Express Card. I receive the rebate of 5% on each of the following, after spending $6000.00, on groceries, drugs and gas.

March 01 2012 at 11:23 AM Report abuse rate up rate down Reply
mclkarim

I use American Express only for groceries and pay it in full every month (it is nice to have that statement that says how much I am spending on food at a glance). It has no annual fee and gives 3% cash back. I use a Cash Rewards Visa for everything else, like recurring monthly charges, shopping, etc. and pay that in full every month. This card also has no annual fee and gives 1% cash back on every purchase. I recently cashed in for $75. Not bad. So, if you can pay your bills in full every month, it is a smart move. Even if you can't, you will get some relief from the interest charged.

February 28 2012 at 11:11 AM Report abuse rate up rate down Reply
nthereoff

I use A Express card. Once a year I get a check from them. This amount is base on how much you charge for that year. I like it better then getting air milage,which I don't always use it. One thing to remember alway pay what you owe each month.

February 28 2012 at 8:24 AM Report abuse rate up rate down Reply