@choosenet
Facebook
More

| Money

THE last budget may have cut fuel duty but it certainly hasn't been enough to stop pain at the pump entirely.

By some estimates, the average motorist now pays a staggering £1,700 a year on petrol or diesel, 10% of most incomes: clearly a few cost-cutting tricks wouldn't hurt.

One of those cost-cutting tricks is paying for petrol with the right reward credit card.

58% of credit cardholders regularly use their cards to pay for petrol already according to Equifax but most aren't getting much in return.

Perhaps that's why we've seen a wave of motoring specific deals hit the market in the past year, those still open to new applicants are listed below.

However, they won't necessarily be the most rewarding deals for all motorists - particularly for those who are already part of a loyalty scheme or are big spenders across the board.

With that in mind, we've also listed general credit card rewards in the next section with notes on how they can benefit drivers.

Motoring specific rewards

AA reward points

The AA credit card offers points on purchases with double points for spending on motoring: that includes any spending that goes on diesel, petrol or LPG Autogas.

AA points are collected as: £2 spent = 1 AA point on ordinary purchases, £1 spent = 1 AA point on motoring spending.

AA members have the above points doubled.

Points can be exchanged for AA products including AA Breakdown Cover and motoring products such as Sat Navs.

They can also be swapped for shopping vouchers or cash back but sticking with the AA rewards gets cardholders more, in real terms, for their money.

AA Rewards credit card
	Motoring tailored reward scheme, double points for AA members.	Apply here »
Representative Example: 16.9% p.a. variable on purchases. This is equivalent to 16.9% APR representative variable based on a credit limit of £1,200. The AA Credit Card is arranged by AA Financial Services Limited (AAFS). Registered Office: Fanum House, Basing View, Basingstoke, Hampshire, RG21 4EA. The AA Credit Card is issued by MBNA Europe Bank Limited. Registered Office: Stansfield House, Chester Business Park, Chester CH4 9QQ..

Tesco Clubcard

As well as Tesco shopping, Clubcard points can be exchanged for MOTs with Halfords Autocentre and the full range of RAC roadside recovery cover.

Tesco Clubcard credit card* holders paying for their petrol at Tesco Petrol Filling Stations get double the number of points ordinary Clubcard customers do, 1 point to every £1.

The card also offers an extra point for every £4 spent anywhere and a 15 month no interest on purchases deal, the UK's longest.

*Please see the Tesco Bank site for the full cost of credit (www.tescobank.com).

Nectar points

Nectar cardholders collect 1 point for every litre of fuel they buy at BP fuel stations and 2 points for every £1 spent in the shop

Some Sainsbury's credit cards [click for cost of credit] offer double points, so two points to the litre.

You can compare the Nectar and Clubcard schemes in general here.

Barclaycard

All Barclaycard credit cards [click for cost of credit] offer long-term petrol rewards in the form of the Barclaycard Freedom scheme.

Petrol spending at Shell earns 0.5% of reward money which can then be spent with Freedom partners which include Halfords Autocentre and Just Tyres.

Note, however, that cardholders cannot redeem their reward money at Shell and that Shell may not offer the cheapest fuel: a cheaper price per litre would likely save more money overall than cardholders would make in rewards.

See more on the programme in our review of whether Barclaycard Freedom is any good.

Cash back

Cash back is the simplest credit card reward around.

Cardholders earn a percentage (albeit not a high one) back when they pay so it's a particularly good reward for taking the sting out of an unavoidable but expensive cost like petrol.

Some credit cards even offer higher cash back rates on petrol spend. For example:

Santander 123 Cashback credit card
	3% cash back on petrol (£300 monthly spend limit on fuel)	Apply here »
Representative Example: 18.9% p.a. variable on purchases. This is equivalent to 22.8% APR representative variable based on a credit limit of £1,200 and including a £24 annual fee. Santander Cards Limited. Registered Office: 2 Triton Square, Regent's Place, London NW1 3AN, United Kingdom..

Santander's 123 rewards credit card offers a 3% cash back rate on petrol spending as well as 1% on supermarket spend and 2% on spend at department stores.

Cardholders can only earn cash back on petrol on up to £300 a month but that could still mean significant earnings. Over the course of the year, those spending that full £300 on petrol every month would earn £108.

Santander is just one cash back credit card option, though.

Here's a quick run down of the rewards a cardholder paying for petrol with a 1% flat rate cash back credit card could expect.

Weekly petrol spend	£30	£50	£70	£100	£120
Cash back earnings	£15.60	£26	£36.40	£52	£62.40

Note that our full comparison table can show you how much actual credit cards would offer (taking into account special offers, fees etc).

For more information see our main article on earning cash back here.

Credit card rewards: how rewarding?

It's well worth noting, at this point, that reward credit cards won't be suitable for all drivers.

Once cardholders start paying to borrow the value of their rewards plummets.

Look at the cash back table above, for example, the cardholder spending fifty pounds a week on fuel will have to pay off two hundred at the end of the month.

With an APR of 14% p.a. that's just over £2 or 7.7% of the cardholders annual cash back earnings and note that both balance and interest rate are conservative for these types of card.

In short, the golden rule is to: always pay back the card balance in full at the end of month.

Those who are concerned that they wouldn't be able to follow that rule would be better off by far concentrating solely on ways to cut the cost of motoring that don't revolve around revolving credit.

We've listed some below.

Drivers looking for a credit card that can offer short-term borrowing to cover petrol costs would, nine times out of ten, be better off looking at 0% purchase or low rate credit cards.

More petrol saving tips

Getting something back on the, inevitably, high cost of driving is great.

But doing something to lower those costs, even if it's just to make them eyebrow raising rather than astronomical, is even better.

Whether they're paying on debit or with a rewarding credit card, though, motorists can save with these petrol saving tips.

Find the lowest price per litre in your area

Shop around or use a comparison service like petrolprices.com to find the forecourts near you with the lowest petrol prices.

According to the AA's fuel price report for November, supermarket unleaded petrol prices are 2.2p per litre lower than the UK average.

Keep your car in good nick

Removing excess weight (taking out heavy loads, removing extras like roof racks and bike racks) and checking tyre pressures regularly makes vehicles much more fuel efficient.

Drive more slowly and more steadily

Smooth driving in higher gears uses less fuel: even Jeremy Clarkson has had to relent on this driving efficiency rule.

Avoid using heating and air conditioning

These two are fuel thirsty and often used unnecessarily.

Remember that short journeys are costly

According to Santander Credit Cards, the UK has 11.4 million 'one-minute motorists' who regularly make less than 0.5 mile car journeys.

Advising drivers to simply use their cars less can sound glib but, as those statistics show, sometimes it's a warning that's well worth heeding.