Get Up to Speed: Your Guide to the Petrol Credit Card

Petrol is an essential purchase for all motorists, and the chance to save money while filling up your tank is obviously a very attractive idea. Petrol credit cards feature a specific loyalty program that rewards purchases of petrol, often rewarding purchases of other products and services, so you can save money on everyday fuel purchases. If you drive often and spend plenty of dollars on petrol, one of these cards could be a very beneficial choice. There are, however, some important considerations to make when comparing and selecting a petrol credit card.

Q: How do they work? A: Petrol credit cards function in similar ways to other types of rewards program cards. Some offer cash back on petrol purchases at specific brand filling stations, giving you a discount each time you fill up. The BP-Citibank Credit Card offers cash back on petrol and any other purchase you make at BP. All other purchases made on the credit card attract a lower rate of cash back.

Other petrol credit cards are linked to a rewards scheme, meaning you can earn points when you make purchases, earning extra points when you buy petrol at affiliated petrol stations. You can then redeem these points for a choice of rewards. The Woolworths Everyday Money credit card allows you to earn reward points when you buy petrol or other purchases at Caltex, Woolworths or Safeway co-branded fuel stations. The rewards scheme isn’t limited to petrol; you earn bonus points on goods at Woolworths or Safeway Supermarkets and other participating stores.

As with other rewards scheme credit cards, there may be restrictions on how you can make savings, such as a limit on the amount of fuel purchase per month that discounts or points are applied to. Other features such as the purchase rate and annual fee should always be considered when comparing deals and calculating if the credit card offers genuine value for money.

Q: Who benefits most from them? A: Petrol rewards cards are suitable for people who drive often, particularly those who travel far for work and buy plenty of petrol. If petrol purchases account for a significant part of you monthly expenditure then a petrol credit card could be a good way of saving money or earning rewards. If you already shop with participating fuel outlets and other stores, and can find a program with rewards that you can make use of, they could be really beneficial to you.

Q: Who isn’t suitable for petrol credit cards? A: Obviously, if you buy little or no petrol then this type of card is not for you. Also, it is important to think about how you use your card and the way you manage you debts. To get the most vlaue you need to use your card often to ensure the rewards and savings offset the cost of the annual fee. If you don’t buy petrol from the specified fuel outlets or shop at affiliated stores then you will not get the most out of this type of card.

Crucially, if you do not pay the monthly balance and have an ongoing debt on your credit card, then a petrol credit card is unsuitable for you. The unpaid balance starts attracting interest, which can quite quickly negate the rewards and savings you make on petrol purchases.

Q: What are the advantages? A: The advantages are the opportunity to earn rewards or save money every time you buy fuel, and often with other purchases. If you buy a lot of petrol, and already shop at the participating outlets and stores, you can save money on an everyday essential that you normally purchase anyway.

Q: What are the disadvantages? A: If the credit card is designed specifically to reward fuel purchases, the biggest disadvantage is the way they compare with other types of reward credit cards. You need to be buy a significant amount of petrol to feel the benefits – if you are making many other types of purchases you may be better off with a card that rewards all purchases. You should calculate what savings you really make on fuel payments to see if the deal is worthwhile.

Q: What other features should I look out for? A: As with all credit cards, you should take into account all the card’s features when comparing offers.

Purchase rate: The purchase rate is a very important feature to consider, especially if you do not always pay the monthly balance in full. Interest applied to any ongoing balance will quickly start to offset the savings you make on fuel purchases, so try to get a standard purchase rate that’s as low as possible. Alternatively, look for cards with introductory offers on purchase interest.

Annual fees: Petrol credit cards often feature a relatively high annual fee. Calculate roughly how much you could potentially save on petrol purchases annually to see how these savings balance with the annual fee. If the annual fee costs more, then the deal’s not worth it for you.

Balance transfers: Some cards feature the option for a balance transfer, so you can move the debt from an existing card and repay at a lower interest rate. Along with earning rewards or cash back on the fuel you buy, this is a great way to get a grip on your finances and reduce your monthly outgoings.

Terms and conditions: Always study the small print to see any restrictions, charges and penalties that may be applied to your account before applying. You should know exactly what purchases will be rewarded and, equally important, what won’t be.

Q: How do I know if I qualify? A: The banks have a set of criteria that you must meet to qualify for any credit card. Generally, these requirements include that you must be over 18 years of age, a citizen or resident of Australia, and that you have a good credit rating. You also need to earn above a stated minimum annual income, which varies between different offers.