Learn how fuel credit cards work and weigh up their pros and cons to decide if this type of card will benefit you.
If you drive, you’ll know that petrol is an ongoing expense that quickly adds up, so finding ways to save when filling up the tank is an appealing proposition. While most of us are aware of petrol discount receipts or vouchers, there are also fuel credit cards designed to offer benefits at the pump. These cards let you earn rewards on petrol expenses that can translate into future savings. While this might present an excellent way to save some money, it’s important to consider their pros and cons before deciding if they’ll be worthwhile for you.
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Benefits of fuel credit cards
While features vary among fuel credit cards, we’ve outlined some of the most popular benefits below:
- Earn reward points. These rewards cards let you earn points per $1 spent on everyday purchases, including petrol. Some cards even offer a higher earn rate on petrol than other purchases. For example, the David Jones American Express Platinum awards 3 points per $1 spent at petrol stations and major supermarkets, and only 1 point per $1 on most other purchases. Purchases made at David Jones are the only transactions with a higher earn rate, at 4 points per $1.
- Earn bonus points. Some of these credit cards are linked to rewards programs that have petrol partners, such as flybuys (partnered with Coles-Shell), Woolworths Rewards (partnered with Woolworths-Caltex) and Velocity (partnered with BP). If you have a credit card linked to one of these programs, you can earn points for petrol twice: once through your credit card, and once through the rewards program loyalty card. In some cases, where your credit card earn rate is more than 1 point per $1, your rewards earning capability is more than doubled.
- Easily access fuel vouchers. If you have a Woolworths credit card that doubles as your Woolworths Rewards membership card, you can do away with pesky paper dockets. This is because your credit card will store any fuel vouchers that you earn from supermarket shopping through the loyalty program.
- Redeem credit for your next petrol purchase. Both the flybuys and Woolworths Rewards programs allow you to redeem points for cash off your future purchases at participating retailers. For flybuys, this includes Coles Express service stations, and for Woolworths Rewards this includes Woolworths-Caltex co-branded service stations.
- Redeem other rewards. With these rewards credit cards, there is a host of other rewards you can redeem your points for, including fashion and jewellery, home and electronic items, lifestyle products and services, as well as flights, hotel accommodation, car rentals and shopping vouchers.
What to watch out for with fuel credit cards
If you’re interested in getting one of these cards, make sure you weigh up the following factors:
- Annual fees. Rewards credit cards usually charge a higher fee for the ability to earn points, and for all their extra perks.
- Interest costs. Interest rates also tend to be higher on these cards, which can be a problem if you intend to carry an outstanding balance on your account.
- Points caps. Some cards impose a limit on the number of reward points you can earn per month, for example up to $10,000. If your expenditure exceeds that cap, you will not earn points for additional dollars spent.
- Petrol reward partners. Since program partners may be limited, make sure your chosen card’s reward partners are establishments you’ll be happy to fill up or shop at.
- Value of rewards. Depending on what items you redeem, the value of rewards from petrol credit cards will vary. You can analyse the value of a reward by dividing its dollar value (or market value) by the number of reward points required to redeem it. This will give you the dollar value of a point with regard to a reward item, which you can then compare with another reward item to derive the greatest value.
How much value can you get from a fuel credit card?
The following table provides details of how many points you can earn from popular petrol credit cards. Note that the points per $1 spent only pertain to credit card spending and do not factor in any other points you might earn through a corresponding loyalty program such as flybuys, Velocity or Woolworths Rewards.
|Credit card||Points per $1 spent on petrol||Points per year (based on $80 weekly petrol spend in 52 weeks)||Rewards value (approximate in terms of cash back, credit or gift card)|
|American Express Platinum Edge||2 points per $1||8,320||$52 card credit (8,000 points = $50)|
|David Jones American Express||3 points per $1||12,480||$78 card credit(8,000 points = $50)|
|Coles Rewards Mastercard||2 points per $1||8,320||$41.60 cash off your Coles Express bill(2,000 points = $10)|
|Velocity High Flyer||1 point per $1||4,160||$23.10 value on a BP Australia gift card (4,500 points = $25)|
|Woolworths Money Everyday Platinum||2 points per $1||8,320||$41.60 cash off your Woolworths bill(2,000 points = $10)|
Points to note:
- The values in the last column are approximate because you can usually only redeem points in specified amounts. For example, with the American Express Platinum Edge card you can only redeem $50 worth of credit with 8,000 points and have 320 points left over. With the Virgin High Flyer card, you will not be able to exchange your points for a BP gift voucher until you have accumulated 4,500 points. Also, the more points you redeem at one time, the better your redemption rate will generally be.
- Your points earn rate is usually positively related to a card’s annual fees, so while the American Express credit cards offer the highest rewards returns, they also come with the highest fees.
Ultimately, the value you will derive from having a fuel rewards card largely depends on your spending habits, the cost of the card and the type of rewards you wish to redeem. It’s always good to research and compare a variety of available cards and their corresponding rewards programs before deciding on the one that will best suit your needs.Back to top