Offset the cost of petrol with the right card
Using the right credit card to fill up your tank could help offset the cost of petrol and save you money.
The cost of petrol can significantly push up the cost of keeping a car on the road. Although fuel prices have come down from the highs seen in 2008, for those with stretched budgets buying petrol is still a big financial burden.
And, according to the AA, cheaper petrol could be a thing of the past; in early January the cost of petrol was less than 86p per litre but the conflict in Gaza and the dispute between Russia and the Ukraine have seen this start to creep upwards.
Drivers in London, East Anglia and the South West are currently paying the most to fill up their tanks, according to the AA, with the average cost of unleaded at 87p per litre. Motorists in the North West, meanwhile, are benefiting from the cheapest unleaded, at 86.1p per litre.
For those using diesel, Wales is the most expensive place to fill up at 99.3p per libre. Yorkshire and Humberside are the cheapest, with diesel costing 98.1p per litre.
Supermarkets remain the cheapest place to buy petrol, with unleaded purchased at their forecourts currently around 2.3p cheaper than at the average garage.
Although petrol may still be cheaper than it was last year, no one wants to spend more than they have to filling up their tank. There are numerous ways you can cut the cost of petrol - from fuel-efficient driving to shopping around. And using the right credit card is also a good way to save yourself some money.
There are a number of deals out there that aim to reduce the burden of higher petrol prices.
Shell MasterCard claims to be able to save drivers £130 each year by offering 3% cashback on Shell fuel purchases. It also offers 1% cashback for using your card elsewhere.
The card, which is funded by Citi Bank, has a typical APR of 16.9% but offers 0% interest on balance transfers for 12 months, subject to a 3% fee of at least £5.
If you tend to fill up your car at the same time as you do your weekly food shop, then it might be worth considering getting a credit card from a supermarket.
Asda Credit Card offers customers 2p off every litre of fuel they buy. It also offers 0% on balance transfers for nine months (subject to a 2.99% fee) and 0% on purchases for three months, but after these periods the typical APR is 17.8%.
The advantage of this card is that you can use it to earn points in exchange for Asda vouchers and to receive a 5% discount at Asda Living Stores. You also receive free home shopping delivery when you spend £99 or more.
Rival supermarket Tesco also offers petrol savings on its Business Credit Card, which promises savings of 2p per litre on Tesco petrol and diesel.
The card, designed for sole traders who want to keep their business expenses separate from their personal savings, has an APR of 15.9% on purchases and balance transfers.
Another way to save money on your petrol and other purchases is to use a general cashback credit card. These tend to offer cashback of up to 5%, so if you pay off the balance in full each month you can actually make money.
The American Express Platinum cashback card offers 5% back on an annual spend of up to £4,000 for the first three months, after which time it reduces to 1.5% cashback. The card has an APR of 18.9% on purchases.
Or Barclaycard OnePulse Cashback Visa offers 5% cashback on Transport for London spend (up to £15 per month), and 0.5% cashback on general purchases of up to £6,000 a month. The ARP is 12.4% variable, but you do receive 0% on balance transfers for the first 12 months, subject to a 3% fee.
Reward credit cards can also be used to save money when buying petrol.
The AA credit card offers customers one point for every £1 spent, which can be redeemed against renewal or upgrade of AA membership, AA insurance or AA European breakdown cover. And you'll receive double points when the card is used to buy petrol.
The APR is 15.9% and you can benefit from 0% interest on purchases for six months and on balance transfers for nine months.
Finally, MBNA reward credit card allows users to earn points when shopping for anything from food to petrol. For every £1 spent you receive one point, and these can be used to pay for flights, wine and high street vouchers. The APR is 15.9%.
Used by the holder to buy goods and services, credit cards also have a monthly or annual spending limit, which may be raised or lowered depending on the creditworthiness of the cardholder. But unlike charge cards, borrowers aren’t forced to pay the balance off in full every month and, as long as they make a stated minimum payment, can carry a balance from one month to the next, generating compound interest. As the issuing company is effectively giving you a short-term loan, most credit cards have variable and relatively high interest rates. Allowing the interest to compound for too long may result in dire financial straits.
This is used to compare interest rates for borrowing. It is the total (or “gross”) interest you’ll pay over the life of a loan, including charges and fees. For credit cards where interest is charged at more frequent intervals, the APR includes a “compounding” effect (paying interest on interest). So for a credit card charging 2% interest a month (equating to 24% a year), the APR would actually be 26.82%.