Conoco Credit Card: The 4% Gas Rewards Died In 2012

Are the days of getting major credit cards from gas stations over? Maybe…

pumping gas holding hand full of hundredsBack in 2011, Citi announced that it was cancelling the Conoco MasterCard. When 2012 rolled around, the card was nowhere to be found on Conoco’s website. Why is this? And what are your next best options?

The Conoco credit card worked like this:

  • Conoco Gas Stations = 4.0% rebate
  • Other MasterCard Purchases = 0.5% on the first $5,000 spent per year, 1.0% after that

According to this industry article, reportedly “the card accounted for only 0.4% of all ConocoPhillips’ card sales.” So why was it so unpopular? Here are my guesses…

Problem #1: Better rewards from universal gas cards

The appeal of this card was limited. Perhaps the biggest drawback is that it confined customers to their stations in order to get the 4%. The top gas credit cards give you 3-5% rewards at all stations, so why would you apply for a card that only gives higher rewards at one chain?

My guess is that this was one of the main reasons more people weren’t using the gas card from Conoco.

Problem #2: The rewards were costly for this type of card

If it were a huge money maker for Citi and Conoco, then they would have kept it going, right?

Obviously paying a 4% rebate is not cheap. On $4 gas that is 16 cents/gallon. The reason major credit cards like the Chase Freedom can afford to pay 5% is because most people use them for spending across the board – not just the 5% categories, but also on their other everyday spending (which earns 1%).

Even though the Conoco MasterCard could be used for spending elsewhere, my guess is that it wasn’t as widely used. Often times when someone has a gas station branded card, they seem to be less likely to whip it out at say, a restaurant or department store. Not to mention, that tiered system that gave only a half-percent on the first $5k probably reinforced that behavior!

Paying that 4% gas rebate would be too costly if the customers were not heavily using the card elsewhere.

Problem #3: Dwindling revenue streams

Although not specific to the Conoco credit cards, the above article I linked to mentions how because of the card regulatory reform from a couple years back, there’s a lot less money to be made by the banks on these types of niche cards.

Furthermore, it claims that consumers’ behaviors with co-branded cards has changed. Now, many use the cards as they should be… paying the bill in full!

What about the Conoco personal card?

Conoco still has one gas credit card left, but are the rewards worth chasing?

The “Personal Card” is NOT a MasterCard – you can only use it at their stations. Yes it does give rewards, but they’re hardly enticing:

  • 5 cent per gallon discount but only if you buy at least 45 gallons in a month
  • The discount will only apply to the first 110 gallons each month

Just run the numbers and you will see how pathetic this is…

Min. Monthly Rebate: 45 gallons X $0.05 = $2.25
Max. Monthly Rebate: 110 gallons x $0.05 = $5.50

It looks even uglier once you factor in the price of fuel. For example, if you are paying $4.00/gallon then the 5 cents only equals a 1.25% rebate. And the higher the price, the lower the percentage.

And do you always buy 45+ gallons per month? For commuters that won’t be a problem but for light/moderate drivers who use fuel-efficient vehicles, they might not even be buying enough to qualify for the nickel per gallon.

So if you’re in the market for a gas card, my recommendation would be something like the AmEx Blue Cash.

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Makes no sense to keep using the Conoco card when you can get non-branded universal credit cards that give higher rebates at gas stations!