Do you automatically choose BP gas stations because of the sweet rewards that you get with your BP Card? If so, you may want to think twice.
BP will be slashing it’s rewards as of March 1, 2012. The new “Pump Rewards” program will take effect with reduced rewards. This is really sad because the BP Visa was one of the, if not the best gas rewards credit cards on the market assuming you filled up at BP.
Let’s take a look at the updated rewards system and how it compares to the previous system (hint hint, it’s not good!). Also, let’s explore some alternatives to the BP Card.
Under the previous rewards program, BP customers earned great rewards during the first 60 days. They earned a 10 percent rebate on up to $500 in gasoline purchases – a value of $50.
Travel and Dining purchases were good for a 4 percent rebate. All other purchases qualified for a 2 percent rebate.
During the first 60 days in the Pump Rewards program, you’ll earn a 25 cent per gallon rebate for each $100 in eligible purchases. This rebate is good for up to 20 gallons on a 1-time purchase, making it very restrictive and limiting the already lackluster rewards that you’d get at that rate, anyway.
Note that purchases at non-BP gas stations do not qualify for rebates. So, if you decide to fill up at Texaco, Sunoco or some other station, you won’t reap the benefits that you would with BP purchases.
Additionally, the enhanced rewards for the first 60 days are only valid with the BP Visa Signature or BP Visa card. The standard BP card does not offer enhanced rewards during the first 60 days.
Suppose that you spend $400 at BP stations during the first 60 days. You wait until this time period is over before cashing in on your rebates. Also, let’s assume that you drive a large vehicle and purchase 20 gallons of fuel at one time.
Additionally, let’s assume that you choose to receive your rebates through a price reduction at the pump when using the Pump Rewards program, as doing so will give you more rewards than by using a statement credit if you purchase the full 20 gallons . Below is a comparison of how this would play out using the previous program versus the new program (under either the BP Visa or BP Visa Signature card):
|Rewards Program||Rebate Details||Total Rebate After 60 Days|
|New||$1 (25 cents per $100 spent) per gallon on up to 20 gallons – 1 time||$20|
As we can see, the previous program would leave you with twice the value in rebates when compared to the new program. Sure, you can get your refund at the pump with the new program, but is the convenience really worth cutting the value of the rebate by 50 percent?
Alternatively, you could have chosen a statement credit of $15, as the new program offers a $15 statement credit for each $1 in rebates. Note that is for each $1 off per gallon, not necessarily total rebates. So, for up to 14 gallons, it is better to go with a statement credit in the new program. For 15 gallons, it won’t matter and for 15.01 to 20 gallons, it’s best to go with a price reduction at the pump.
The situation doesn’t get any better after 60 days. In fact, it gets worse.
Under the previous rewards program, you’d earn a 5 percent rebate on up to $500 in monthly purchases at BP locations. That’s effectively an unlimited 5 percent rebate for most consumers, as most people spend less than $500 on fuel each month.
Going by what I last paid for gasoline, I could get 37 gallons per week and come in at less than $500 per month. If you drive a standard vehicle that gets 25 miles per gallon, you’d have to drive 925 miles per week to use that much. Unless you are a road warrior or have modified your vehicle to include a jet engine, you probably don’t use that much fuel. In a nutshell, you’d get a 5 percent rebate on just about every purchase at BP under the previous program.
Travel and dining purchases were good for rebates of two percent with the previous program. All other purchases qualified for a rebate of one percent.
The BP Visa Signature and BP Visa cards offer the same financial rewards after 60 days. You’ll earn a 15 cent rebate per gallon on up to 20 gallons for each $100 in spending. For all other purchases, you’ll earn 5 cents off on up to 20 gallons for each $100 in spending.
The standard BP Card offers a rebate of 5 cents per gallon on up to 20 gallons of fuel per $100 spent.
Suppose that you spend $150 per month at BP stations. Using the rest of the same assumptions as we did in the first comparison, let’s take a look at how the previous and new programs compare after the long-term rates kick-in:
|Rewards Program||Rebate Details||Total Rebate On $150 in Monthly Spending|
|New||15 cents per gallon on up to 20 gallons-1 time||$3|
As we can see, the previous program still performs much better after the initial 60 days is over. Also, consider the fact that the standard BP Card would offer even less rewards than the Visa Signature and Visa card, which were used in this example.
The Pump Rewards program is highly restrictive. It includes the following restrictions:
- Rebates expire 12 months after they are earned
- You must purchase a full 20 gallons to maximize your rebate, as leftover rebates cannot be used at a later time
- Rebates cannot be taken at the pump in Alabama or New Jersey
- BP reserves the right to deny or revoke participation to anyone for “Any reason whatsoever”, according to their terms
Basically, you better drive something with a big fuel tank to maximize your rewards with this card. Also, if you live (or drive frequently) in Alabama or New Jersey, you’re virtually out of luck with the Pump Rewards program.
Instead of going with a BP Card, there are better alternatives. These include the Blue Cash Everyday from American Express and Discover Open Road cards. Below is a brief overview of each card.
You’ll be able to use this card at any gas station – not just BP stations. Also, you won’t have to purchase 20 gallons at once to cash-in on your rebates. You’ll get 2 percent back on whatever amount you purchase without a load of strings attached.
Additional rewards include 3 percent cash back at supermarkets, 2 percent cash back at department stores and 1 percent on everything else. This card is much more user-friendly and practical than any version of the BP Card, so it’s an easy choice if you are comparing the two.
This card does come with some restrictions. You’ll earn at least 1 percent cash back on most of your purchases. However, you must spend at least $3,000 annually before that rate kicks in.
You’ll get a $150 Restaurant.com gift certificate with this card, so a few meals will be take care of for you. It’s a much better option than the BP Card, but I recommend going with the Blue Cash Everyday card for it’s user-friendliness.