Drivers will be keeping an eye out for all sort of deals as they hit the road this summer now that gas prices are hovering at an average of $4.84 a gallon in Michigan shortly before Memorial Day weekend.
Some might score discounts by loading up on groceries and gift cards; others might be picky about which credit cards they choose to use. It’s once again time for some wild strategies as we face an astronomical spike in gas prices.
In Michigan, the average price of regular gas shot up by $1.65 a gallon — or nearly a 52% increase — from the same time a year ago, according to the latest AAA data. Gas prices are up about 11 cents a gallon from a week ago.
Nationwide, the average price for regular gas was about $4.51 a gallon, which is still shy of the record of $5.016 a gallon for reached on June 14, 2022. The spike in 2022 followed Russia’s massive invasion of Ukraine in February 2022.
AAA projects nearly 1.2 million Michigan residents will travel by car over Memorial Day weekend.
How Kroger fuel points and gift cards cut gas costs
How do you save money? It’s time to once again think about some plastic that could ease the pain at the pump.
Some consumers play the gift card game, buying gift cards for stores where they are planning to shop or places they’re aiming to go out to eat to build up more fuel points at Kroger.
And Kroger has one deal before Memorial Day that is designed to lure in shoppers who plan to travel and want a break on sky-high gas prices.
From May 20 through May 23, Kroger is offering customers four times the fuel points storewide with a digital coupon download. In addition, customers who are members in the Boost by Kroger Plus program earn five times the fuel points during that same window.
That’s a long list of purchases, including groceries, not just gift cards.
Standard exclusions still apply, including purchases of fuel, postage stamps, lottery tickets, mail-order services, money orders/transfers, Kroger Family of Stores gift cards, Visa/Mastercard/Amex and reloadable prepaid cards, sales tax, and bottle deposits. Kroger has many details at the website www.kroger.com/o/fuel/faqs.
For years, people have been juggling their fuel points to save extra cash.
My husband recently stopped by Kroger to buy $100 in gift cards for Lowe’s Home Improvement before he and my son went out looking at some lawn mowers. My brother-in-law used to buy gift cards at Kroger to go out to eat on the weekends — and earn discounts on gas.
The Kroger Fuels Points program builds reward points when you buy gift cards, groceries and other goods and you’re able to get discounts on the price at the pump.
If Kroger shoppers spend $500 in a month, they earn 50 cents off per gallon. You’d earn 2 Fuel Points for each $1 spent buying most gift cards. At times, some gift card purchases can be worth four times the fuel points.
Kroger customers earn 1 point for every dollar spent at Kroger stores and 100 points equals 10 cents off per gallon. At Kroger Fuel Centers, customers can redeem up to $1 off per gallon if they’ve built up 1,000 points.
Fuel points are earned monthly and expire at the end of the month following the month in which they were earned — which can sound kind of confusing. For example, points earned in May would be available to redeem through the end of June.
Beyond storewide promotions, Kroger often runs “4x Fuel Point” promotions throughout the year on third-party gift cards — including restaurants, retail stores, streaming services, and travel brands.
Kroger does sell Shell gift cards, and customers can earn Kroger Fuel Points when buying them, especially during bonus fuel point promotions. But you can run into some limits there.
Cam Barrett, head of communications and public affairs for Kroger Co. Michigan, told the Detroit Free Press that Kroger Fuel Points at participating Shell stations are limited to 10¢ off per gallon or 100 points.
“So, customers typically cannot ‘double dip’ or stack multiple fuel discounts together in the same transaction at Shell,” Barrett said.
With the Shell program, you can join the Kroger stores rewards program and earn fuel points on grocery purchases. You’d earn 1 fuel point for every $1 spent and redeem those points for savings of 10 cents to $1 a gallon at participating Shell stations.
And, no surprise, shoppers love thinking up new angles to save money on gas, especially when prices are high.
“Michigan customers are savvy shoppers,” Barrett said. “When fuel prices rise, we consistently see them lean into the savings tools we offer to stretch their dollar. That includes loading more digital coupons, taking advantage of 4x Fuel Point promotions, and using gift card purchases as a way to bank points.”
Which credit cards offer the best gas rewards
One strategy — if you pay off the bill each and every month — could be to pull out the right credit card to get some discounts.
Many deals on gas-related credit cards are out there, but some of the best ones offer an attractive amount of cash back on gas purchases, said Ted Rossman, principal analyst for Bankrate.com.
Rossman said he typically favors gas-related credit cards that offer a percentage rebate, such as 3% or 5% back on gas, over credit cards that offer a flat 5 cents or 10 cents off a gallon.
If gas is $5 a gallon, for example, you’d ultimately end up paying $4.75 a gallon if you had a 5% rebate. By contrast, you’re paying $4.90 a gallon if you’re only getting 10 cents off when the price is $5 a gallon — which essentially amounts to a 2% rebate at these price levels.
As prices at the pump soar, you’d typically see more cash back on a gas purchase if you’re getting a rebate based on a sizable percentage of what you spend, Rossman said.
The Costco Anywhere Visa offers 5% cash back on gas bought at Costco and 4% cash back on other eligible EV charging and gas elsewhere. Spending $90 on a fill-up at Costco would translate into $4.50 cash back — or, at these prices, basically a free gallon of gas.
Limits apply. On gas purchases, for example, the Costco Anywhere Visa offers 5% and 4% rewards on up to a combined $7,000 spend per year, after that, the reward falls to 1%. The card also has a complex structure offering 3% on restaurants and eligible travel; 2% on all other Costco purchases and 1% on purchases elsewhere. The card has no annual fee, but you do need a paid Costco membership. A general membership is $65 a year.
The Sam’s Club Mastercard also offers 5% back on gas bought anywhere on the first $6,000 a year and then 1% afterward. The card also offers 3% on purchases at Sam’s Club for Plus members and 3% on dining and takeout; and 1% for purchases at Sam’s Club for regular Club members, as well as other purchases. A regular priced Club membership is $60 a year.
Another option: The Citi Custom Cash card offers 5% back for your highest spending category each monthly billing cycle, Rossman said, and gas is one of the categories. The other categories are: restaurants, grocery stores, select travel, select transit, select streaming services, drugstores, home improvement stores, fitness clubs and live entertainment. The bank determines your highest spending category, based on your purchases, for each billing cycle. No annual fee.
The monthly limit for those rewards is up to the $500 spent — or up to $25 in cash back a month. Over a year, you’re potentially looking at receiving rewards on up to $6,000 spent on gas.
Obviously, you could hit a spending cap sooner now that gas prices have climbed dramatically since the Iran war began in late February. Even so, many drivers could still benefit.
“Those caps are more than enough for the typical household but take note if you’re a heavy driver,” Rossman said.
The downside of some credit cards issued by gas companies is that many of those cards can only be used at those branded gas stations for fuel or items at the convenience stores there, not elsewhere for shopping or eating out.
Shell announced its new Shell Performance Elite World Mastercard on May 12 where you can earn 4% back at Shell on gas, EV and in-store purchases. It also offers 3% back on dining and groceries; and 2% back on everything else. New applications opened on Monday, May 18.
According to the rewards program terms and conditions as of May 15, “there is currently no limit to the amount of rewards that can be earned.” But their fine print also notes that structure can change or be modified from time to time with notice given to cardholders.
Rewards are earned as statement credits and are redeemable toward eligible Shell purchases. There are no limits on these rewards or on gas that a cardholder buys, according to a Shell spokesperson.
With any credit cards, you must keep an eye on interest rates now that annual percentage rates can hover above 20% for many people. You don’t want to be saving a few cents a gallon only to be socked with super high rates if you don’t pay off the bill in full each month.
You also always want to keep an eye on when any rewards might expire with any given card to take advantage of them in time.
The Costco Anywhere Visa, issued by Citi, has an annual percentage rate that ranges from 18.74% to 26.74%, based on your creditworthiness.
Another thought: See what kind of rewards your existing credit card already offers. A college friend recently told me that he has been redeeming his American Express rewards on his credit card for $25 Shell gift cards that he uses when traveling to northern Michigan.
Since January, the rewards app called Fetch said it has seen a 20% increase in users redeeming points for fuel-related offers. Fetch allows users to redeem points for gas gift cards at Shell.
Apps that help Michigan drivers save at the pump
Apps from Shell, Exxon Mobil and others let you tap into rewards programs.
The Upside App works with other programs on gas, fast food and other restaurants, and groceries at participating retailers. In some cases, you can get 10 cents a gallon off gas, depending on the participating gas station in an area.
Rossman, who has used the Upside App, said you first go to the app to find participating locations near you. Upside has specific partners, so not every gas station will be participating. Look through the list of deals and opt in before purchasing.
He said you’d then pay with a linked credit or debit card, take a photo of your receipt and upload it via the Upside app. The cash back rewards should be paid out within a few days. You can combine Upside’s discounts with whatever rewards your credit card offers, Rossman said.
Apps, such as GasBuddy, Gas Guru, and AAA, allow you to eyeball gas prices in a given area to find the best deals.
Contact personal finance columnist Susan Tompor: stompor@freepress.com. Follow her on X @tompor.
This article originally appeared on Detroit Free Press: Michigan gas prices are near $5. Here’s how drivers are saving at the pump
Reporting by Susan Tompor, Detroit Free Press / Detroit Free Press
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