Just as it was recovering (sort of) from its PR nightmare, BP decided to slash rewards on its branded credit card, the BP Visa. The card, once considered among the best gas cards available, is now mediocre-bordering-on-sucks. Originally, it gave 5% back on BP gas, plus 2% on travel and dining and 1% elsewhere. The best part? It gave double rewards – that’s 10%, 4% and 2% for the first 60 days. Now, well, not so much. Its a veritable minefield of terms and conditions gotchas, and for all its nice looks, its a disaster of a rewards program (too soon?).

How far the mighty have fallen

Unwilling to have even one good thing associated with their brand, even if it’s just a credit card, BP sent out a mailer to cardholders announcing a change to its rewards structure. Effective March 3rd, the new “Pump Rewards” kick in:

  • Earn 15 cents off per gallon per $100 spent at BP, up to 20 gallons
  • Earn 5 cents off per gallon per $100 spent elsewhere, up to 20 gallons
  • For the first 60 days after the account opens, earn 25 cents off per gallon per $100 spent anywhere if you’re a new cardholder, up to 20 gallons

You might be thinking to yourself, “25 cents off per gallon? That sounds downright good!” But wait for it…

BP to cardholders: read the terms and conditions, b.

Let the fine print games begin! You can redeem your rewards in two ways: as a fuel rebate, and as a statement credit.

At-the-pump rebate: You accumulate rebates at a rate of 0.0015 per $1 spent at BP gas, which works out to 15 cents off per gallon once you’ve spent $100. You then choose to redeem your rewards at the pump. But when it comes time to actually use your credit, you’re hit by the fine print:

  • You can’t bring the price of gas down to $0. So if gas cost $3 a gallon, you can’t spend $2,000 and earn enough of a rebate credit to get free gas.
  • You can only apply the rebate to one fill-up. Since most of us don’t have 20-gallon tanks, this is a huge limiting factor. If you’re filling up a Prius, you just cut the value of your rewards by more than half.
  • The rebate only applies to up to 20 gallons, so even if you did have an Army-grade vehicle that held 100 gallons, you’d still be limited to $3 in savings per $100 spent at BP.

So if you redeem for a rebate, the absolute best value you’d get is 3% on BP gas and 1% elsewhere, and 5% back on the first 60 days. Keep in mind that the 60-day perk is available only if you are a new cardholder – just switching rewards programs won’t cut it. But in all likelihood, your rewards rate will be a lot lower. If your tank holds only 10 gallons, your rewards rate is just 1.5%, 0.5% and 2.5%, respectively.

Statement credit rebate: If you go this route, you get a statement credit of $15 for every $1 you earn in rebates. This means that to earn a $1 credit, you’d have to spend:

  • $44.44 on BP gas
  • $133.33 everywhere else
  • $26.66 during the promotional period

How do those rewards rates stack up? That’s

  • 2.25% back on BP gas
  • 0.75% back everywhere else
  • 3.75% back during the promotional period

Your statement credit does not apply to your minimum payment. This is how BP will screw you over.

Let’s imagine that you’ve accumulated a $15 statement credit, your minimum payment is $15 and your balance is $25. Theoretically, you should be on the hook for $10, because the $15 statement credit is applied to your $25 balance. Not so fast. BP requires you to pay $15, no matter if you have enough rewards that your effective balance is less than that. You’d have to spread your $15 statement credit over two billing periods, and if you should mistakenly send in a $10 payment, watch out for late payment fees, a penalty interest rate, and a slap to the credit score. Nice, BP. Very nice.

The best reason to not get the BP Visa: all the other options

At the end of all this, you might still be thinking that the 60-day promotional 5% rebate 3.75% statement credit is still worthwhile. Here’s why it isn’t. Let’s say you spend $1,000 in the first 60 days. That’s a maximum $50 gas rebate (remember: applicable to only one fill-up!) or $37.50 statement credit that’s just waiting to screw you over.

  • The AmEx Blue Cash Preferred gives $100 cash back for spending just $500 n 60 days
  • The Chase Freedom gives $200 cash back, also for spending $500, and they give you 3 months to meet the threshold

That’s a much better signup bonus. The BP card makes its high rewards rate sound all sexy, but when you compare it to standard bonuses, it really can’t compare.

The American Express Blue Cash gives 3% cash back on gas, plus 6% on groceries, 3% on department stores and 1% elsewhere. It gives cash back, so there aren’t any silly minimum balance or one-time-fill-up gimmicks. There’s a $75 annual fee, but spend $25 a week on groceries and the Blue Cash has already outstripped the BP card with room to spare.

The Chase Freedom, as we mentioned, gives a $200 signup bonus. But on top of that, it gives 5% cash back on rotating bonus categories and 1% elsewhere. During the first and third quarters (January – March and July – September), those bonus categories include gas. You’re earning 5% cash back on gas for half the year, and you can also earn 5% back on groceries, restaurants and more. There’s no annual fee on this card, and again, earning cash back frees you from dumb restrictions.

The Discover More is another 5% cash back rotating bonus card that earns bonus rewards on gas in the first and third quarters. While it’s not as impressive as the Freedom (it has a 1% base rate, but is subject to a spending threshold: the first $3,000 in annual non-bonus spending earns only 0.25% back), it earns an average of 3% cash back on gas and features bonus categories like movies, restaurants and department stores. However, it has no signup bonus.

Verdict: The BP card sucks now. You can find any number of cards that will give better rewards, and won’t screw you over in the process.

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