The price of gas has risen 30% in the past year and shows no signs of going anywhere but up.
Since fuel is a necessity for most Canadians, cutting our bill as prices rise can be a difficult task. However, by using gas rewards cards you can counteract those rising gas prices, at least partially.
Gas Rewards Cards: Petro vs. Esso
Most major gas companies have loyalty programs, with PetroCanada’s Petro Points and Esso Extra points the most well known in Canada. But now the banks are getting in on the act with both RBC and CIBC offering gas rewards cards that give you money back every time you buy gas.
Both gas rewards cards have no annual fee and give members the ability to earn loyalty points with every purchase and redeem the points for free gas rewards at the affiliated gas station.
With the RBC Esso Visa, members earn double points with every fill-up at participating Esso stations. The key benefit of the CIBC Petro Points MasterCard is the ability for clients to save up to seven cents per litre at PetroCanada stations. Both programs allow clients to redeem points instantly at the pump.
As stand-alone programs, Petro Points and Esso Extra points aren’t worth much to consumers. With Esso Extra, you earn one point for every dollar you spend on regular fuel at Esso stations. With Petro Points, you earn five points per litre on regular fuel at Petro-Canada stations.
When you spend $300 per month on gas at $1.28 per litre, you’ll earn $20 in free gas with Esso Extra and $10 in free gas with Petro Points. That’s not enough to get you a quarter-tank of gas these days.
Here’s where using a rewards credit card can supercharge your earning potential and save you money. When you spend $300 per month on gas and average $1,500 per month in total monthly spending on your card, the results are much different.
| Credit card | Annual spend on gas | Annual spend on card | Free gas |
| CIBC Petro Points MasterCard | $3,600 | $18,000 | $194 |
| RBC Esso Visa | $3,600 | $18,000 | $155 |
The CIBC Petro Points MasterCard is a better deal because you can earn 50% more points on grocery and pharmacy purchases, plus an additional 5,000 bonus points when card purchases exceed $1,000 for the month.
Canadian Tire
Looking outside the major retail brands, Canadian Tire is another option to consider for gas rewards. They have a solid rewards program where you can save up to 10 cents per litre when you use the Canadian Tire Gas Advantage MasterCard for your everyday purchases. Here’s how it works:
| Spend this month | Savings next month |
| $2,000 or more | 10 cents per litre |
| $1,000 – $1999 | 8 cents per litre |
| $500 – $999 | 5 cents per litre |
| $0 – $499 | 2 cents per litre |
Using the Canadian Tire Gas Advantage MasterCard, you can save $222 annually when you spend $300 per month on gas and $1,500 on total monthly purchases. This beats both Esso Extra and Petro Points, but with only 270 locations across the country, Canadian Tire gas bars may not be the most convenient option.
Cash Back Rewards Card
When combined with an affiliate credit card, gas rewards cards can subsidize your annual spending by fuel by 4-6%, enough to get you a couple free tanks of gas each year. While these are decent options to consider – certainly better than nothing – most people are better off using a no-fee cash back rewards card.
The MBNA Smart Cash MasterCard gives 2% cash back on gas and grocery purchases, and 1% cash back on all other spending. New cardholders enjoy a bonus reward rate of 5% for grocery and gas purchases during their first six months.
With the Smart Cash card, members can earn up to $360 cash back in the first year when they spend $600 per month on groceries and gas, and $1,500 on total monthly purchases. After the first year, members can earn $252 in cash back rewards each year. That’s more savings than the Canadian Tire rewards program offers.
For many of us, it’s not practical to car pool or to leave the car at home. We need to find other ways to save on fuel. Try to find a gas rewards card that provides superior overall benefits without having to drive to distant gas stations or pay extra fees.
Sign up for the MBNA Smart Cash MasterCard here – (link)
The Capital One Aspire Cash World MasterCard was introduced back in August 2011 as a premium cash back rewards card with an annual fee of $120. I was just sent some new information from Capital One Canada on an exciting change to this card, which makes it one of the top cash back credit cards in Canada.
New Capital One Aspire Cash World MasterCard
The new Aspire Cash World MasterCard is now available and Capital One is now offering this product with no annual fee. Cardholders will still receive the same World MasterCard benefits as before, including travel medical insurance.
Other changes to the Capital One Aspire Cash World MasterCard include:
- Earn 1% in cash rewards on all purchases (previously 1.5% cash rewards)
- Anniversary bonus of 50% extra cash rewards every year (previously 20% extra cash rewards)
- $100 bonus cash reward on their first purchase (no change)
The 50% anniversary cash rewards bonus is based on the amount of cash rewards earned that year on total net purchases. For example, if you earned $300 in cash back rewards, you will receive an additional $150 on your membership anniversary date.
There is still no limit on the amount of cash a cardholder can earn. Just like with the Capital One Aspire Travel World MasterCard, you can redeem as often as you want with no minimum or maximum amount.
How Much Cash Back Can I Earn?
The Capital One Aspire Cash World MasterCard is a good choice for people who make over $70,000 in annual income, spend at least $2,000 per month on their credit card and pay off their balance in full each month.
I spend approximately $2,600 each month on my credit card. Here’s what my potential cash rebate will be from the Capital One Aspire Cash World MasterCard in the first year:
- First purchase bonus – $100
- 1% cash rewards on all net purchases – $312
- 50% anniversary bonus – $156
Total cash rebate in the first year = $568
After the first year, the cash back rewards fall to $468 per year.
Compare that to the cash back rewards earned from the no fee MBNA Smart Cash MasterCard in the first year and beyond:
- 5% rebate on gas and groceries for the first 6 months – $120
- 2% rebate on gas and groceries thereafter – $48
- 1% rebate on all additional purchases – $102
Total cash rebate in first year = $270
After the first year, the cash back rewards fall to $198 per year.
Final Thoughts
When you take all of these changes into account (no annual fee, 50% extra cash rewards, World MasterCard benefits, no restrictions on earning and redeeming cash rewards) it looks like the Aspire Cash World MasterCard is the new king in the category of best cash back rewards credit card (no annual fee).
With Capital One, I also like that you can redeem your cash back rewards by cheque or statement credit, with no minimum. The MBNA Smart Cash MasterCard only sends cheques once you reach the $50 minimum threshold.
I am definitely considering switching to the new Capital One Aspire Cash World MasterCard. The travel benefits alone make switching cards worthwhile, and now with no annual fee and the best cash back rewards in their category, this card looks like a winner.
- Note: As of August 20th, 2013 Capital One is no longer accepting new applicants for this card.