The killer app for defeating high gasoline prices is to buy an electric vehicle.
Wait – they’re expensive and in short supply right now. You’ll need some other strategies for limiting the damage to your finances caused by the soaring cost of gas.
Buying energy stocks is one. They’re having a run for the ages this year and show no signs of slowing down. There are also lots of day-to-day driving tips that can help cut gas consumption – properly inflate your tires, change your oil on schedule, coast to red lights and reduce highway speeds.
Your next line of defence: Check out the savings and points-earning power of the many credit and debit cards that offer rewards geared specifically for spending on gas.
A CAA membership card can also save you money. Swipe your CAA card when paying for a fill-up at Shell stations and you save three cents a litre.
If you have a debit or credit card issued by Royal Bank of Canada, you can save three cents a litre on gas at Petro-Canada stations and earn an extra 20 per cent on the Petro-Points loyalty program. Just link your card to Petro-Points via RBC’s online or mobile banking platform.
Oil prices are rising because of supply concerns related to Russia’s invasion of Ukraine, combined with strong demand for fuel as the economy bounces back from pandemic lockdowns. Another problem is that capacity to refine oil hasn’t kept up with demand – a recent Globe and Mail story explained how this has pushed up gasoline prices higher than we might have expected, given the decline in oil prices.
The CAA says the national average price of gas at midweek was $2 a litre, up from $1.27 a year ago. If you use 50 litres of gas a week, your monthly gas costs have jumped to about $433 from about $275, – a rise of 57 per cent.
Here’s how to squeeze at least a small benefit from that extra spending: Find a reward credit card that offers a premium level of points for spending on gas. You’re spending more on gas – why not earn more points as well?
In the no-fee category, the Tangerine Money-Back Credit Card is noteworthy because you can get 2-per-cent cash back on gas. This card has 10 spending categories, including gas. You choose two of them to get 2-per-cent cash, while the others earn you 0.5 per cent. Cash you get back can be used on your card balance.
CIBC Dividend Visa Infinite is a reward card with an annual fee that offers 4-per-cent cash back on gas and groceries and lesser points on other purchases. You get 3-per-cent cash back from TD Cash Back Visa Infinite on gas, groceries and recurring bill payments and 1 per cent on everything else.
If you want your gas spending to build travel and lifestyle rewards, Scotiabank Gold American Express offers three points per dollar spent on gas and transit such as rideshares, taxis and transit. Five points per dollar are available for groceries, restaurants, bars and fast food, and there are no transaction fees on foreign currency transactions.
Another card to consider is American Express Cobalt, which offers two points per dollar spent on gas and travel in general, and five points per buck spent on food and drinks.
If you often buy gas and other stuff at Canadian Tire, take a look at the no-fee Triangle Mastercard. You get five cents in Canadian Tire money per litre of gas, which can be used to help pay for future fill-ups at Canadian Tire. You can also earn Triangle rewards at Husky gas stations.
One more gas-saver from Canadian Tire is the no-fee Gas Advantage card, which gives you a discount at the pump of up to 10 cents a litre. The more you spend on the card each month, the higher your discount. For example, spending per month of up to $499.99 gets you two cents off per litre and $2,000 or more per month gets you a 10-cent discount.
We’re driving from Ottawa to Prince Edward Island this summer and I’m starting to think about strategies for managing gas costs. Avoiding Montreal’s quicksand traffic is part of the plan, as is keeping an eye on tire pressure and liberal use of cruise control on highways. I’m also looking at our portfolio of credit and debit cards to find the ones that punch back against soaring gasoline costs.
Are you a young Canadian with money on your mind? To set yourself up for success and steer clear of costly mistakes, listen to our award-winning Stress Test podcast.
Rob Carrick