Credit Where You Need It

Gasoline reward cards can take (some) bite out of pump prices

My simple advice for dealing with high gas prices: use less. There are other ways to squeeze a few dollars more out of your monthly gas budget.

Drive nine miles for every 10 you did before. Combine trips. Avoid unnecessary trips. Walk. You'll save 10% of your gas bill, not to mention total vehicle costs. That's a good start.

Change the air filter, fill the tires, and get the lead out of your trunk and your foot, as I've already written about. That will save another 10%-13% according to U.S Department of Energy figures -- or maybe more.

Do all of the above, and you'll save a lot more than you will by driving around town looking for the cheapest gas. And, frankly, you'll save more than you would with what I'm about to share.

But it's still worth 15 minutes to check out one more way to save maybe up to 5% on gas -- and maybe more during this summer's heavy driving season. How? Check out so-called gas reward cards.

Old Idea, Right Time

Actually, gas reward cards have been around for a while. Gas reward cards are regular reward cards -- cards that pay a percentage of all purchases as a rebate, bonus dollars or, in some cases, mileage or points.

A reward card becomes a gas reward card by paying a higher percentage -- perhaps 3% to 5% -- on gas versus 1% on ordinary purchases.

It's a "loss leader" marketing strategy. The idea is to get you hooked on the card for gas purchases, then have you use the card more for other purchases. The "loss leader" part of the deal has suddenly become more valuable.

Finding Your Gas Reward

You can easily find gas cards through two portals I checked: creditcards.com and pumpandsave.com. I like the pumpandsave site best; it offers calculators to measure savings and some background tips about these cards.

There are three main types of cards:

1. Cash bonus cards are most common. These cards offer the larger cash bonus for gas and certain other purchases in addition to the standard cash reward. Discover's Open Road card and Citibank's Dividend Platinum Select MasterCard are examples, with rebates up to 5% for gas purchases. Both cards feature no annual fees and moderate interest rates.

2. Points and mileage cards. Capitol One issues points, but points are always worth less to me than cash because there are limits to how I can spend them.

3. Oil company affiliate cards. Intriguing, but not widely available, are Visa and MasterCard cards issued with major oil companies. The Chase BP Visa Rewards Card is the best example, paying 5% for BP gas purchases. For summer driving plans, know that the rebate is doubled for the first two months -- 40 cents a gallon at today's prices. That's pretty good!

Discovering the Best

As with any card, you'll have to read the fine print on late fees, interest adjustments, qualifying purchases and "tiered" rewards, where the full percentage doesn't kick in until you spend a certain amount each year. Most of these cards have no annual fees.

With all these issues in mind the Discover Open Road seems best, and the Discover customers I know have had good experiences over the years. I'd also keep my eyes open for more gas-affiliate cards like the BP card.

Every Little Bit Helps

I normally don't get too excited about small paybacks or discounts that make you do something -- like take on a new credit card -- in return.

And saving 3% to 5% of your gas cost may not seem like much. Let's see -- drive 12,000 miles a year at 20 mpg and that's 600 gallons a year. At $4 a gallon, that's $2,400. Five percent of that is $120. Not bad, that's two fill-ups.

Suppose you're a bigger gas consumer. As a family with two cars, you put 15,000 miles on each. That's 1,500 gallons at 20 mpg for each car. You have a boat too. That's 300 more gallons. Total: 1,800 gallons a year. Or $7,200 a year. Now 5% of that is $360, a pretty respectable number. Even 3% is $216 a year.

I seldom recommend adding credit cards, but you might consider replacing an existing card with one of these. Every drop out of your gasoline budget helps.

Jennifer Openshaw is the author of "The Millionaire Zone" and CEO of the Family Financial Network. She hosts ABC Radio's Winning Advice and serves as an adviser to some of America's top corporations. You can reach her at jopenshaw@themillionairezone.com.