BACK

Cash Back

Fewer gas rebates for cash back credit cards

Summary

As gas prices increase, gas rebate credit cards decrease their cash back rewards. Learn why at CreditCards.com.

The content on this page is accurate as of the posting date; however, some of our partner offers may have expired. Please review our list of best credit cards, or use our CardMatch™ tool to find cards matched to your needs.

For many drivers, high gas prices at least had one positive – sizable rebates for gasoline purchases made with certain cash back credit cards.  But it looks as if those rebates could decrease significantly if other credit card issuers imitate the recent changes made by Citibank and American Express.

Citibank announced that it will cut the rewards earned by Citi Dividend MasterCard holders to 2 percent from 5 percent for purchases made at gas stations, pharmacies and supermarkets.  Meanwhile, American Express said that beginning in October it plans to end double cash back points earned for “everyday” transactions by cardholders in its Membership Rewards program.

According to analysts, the reduction in cash back earnings will likely follow across the credit card industry.  Although credit card issuers are not losing money on rewards programs, they have not been as profitable as other areas, causing the companies to scale back.

Still, gasoline sellers have yet to report any plans to cut reward programs on their credit cards.

However, industry watchers note that credit card issuers have basically accomplished their goal of getting consumers to pay for both large and small purchases with their credit cards.  They add that with merchants paying the card companies a 2 percent or 3 percent fee for each transaction, issuers like Citi can’t afford to give a rebate of 5 percent unless it gets the money another way, such as from fees or from a revolving card balance.

But cardholders shouldn’t worry that rewards are vanishing altogether.  Instead, credit card issuers are unveiling new versions of their reward programs.  Citi will still pay 1 percent cash back on most purchases made with the Dividend MasterCard, up to $300 a year, with the 2 percent cash back offer extended to new categories, including purchases made at convenience stores and for utility bills paid with the card.  Additionally, purchases made at a group of 300 selected merchants in Citi’s Dividend Merchant Network (such as Linens ‘n Things and Sears) will earn cardholders 5 percent to 7 percent cash back, with no annual cap.

While AmEx is concluding its 4-year old payout of double points in its Membership Rewards program for purchases made at groceries, gas stations and drugstores, cardholders can still earn single points.

Editorial Disclaimer

The editorial content on this page is based solely on the objective assessment of our writers and is not driven by advertising dollars. It has not been provided or commissioned by the credit card issuers. However, we may receive compensation when you click on links to products from our partners.

What’s up next?

In Cash Back

Let credit cards work together to save you money

Compare reward credit card offers to see which cards will give you the most benefit.

See more stories
Credit Card Rate Report Updated: April 8th, 2020
Business
14.03%
Airline
15.50%
Cash Back
16.22%
Reward
15.93%
Student
15.87%

Questions or comments?

Contact us

Editorial corrections policies

Learn more

Join the Discussion

We encourage an active and insightful conversation among our users. Please help us keep our community civil and respectful. For your safety, do not disclose confidential or personal information such as bank account numbers or social security numbers. Anything you post may be disclosed, published, transmitted or reused.

The editorial content on CreditCards.com is not sponsored by any bank or credit card issuer. The journalists in the editorial department are separate from the company’s business operations. The comments posted below are not provided, reviewed or approved by any company mentioned in our editorial content. Additionally, any companies mentioned in the content do not assume responsibility to ensure that all posts and/or questions are answered.