Gas prices are sky high — but you can cut your costs by using a gas rebate card. We'll explain.

It's no secret that gas prices are surging. A gallon of regular unleaded gas currently costs an average of $1.97 nationwide, according to the American Automobile Association. But that doesn't mean you need to start riding your bicycle to work. You can slash up to 10% off your costs simply by using a gas rebate credit card to fill up your tank.

With a 10% savings on every transaction, pretty soon you're talking about real money. If, for example, you drive 15,000 miles per year in your 2004 Lexus, you could spend as much as $2,100 a year on gas, according to the Environmental Protection Agency's fuel economy calculator. (Click here to estimate your fuel costs based on your car model, mileage and gas prices in your area.) But by using a gas rebate credit card, you could get up to $210 of that bill back. Not bad.

The cards are wining plaudits from industry experts. "I'm a big fan of these credit cards," says Curtis Arnold, founder of the credit information web site Cardratings.com.

In the table below, we've listed four of the most generous gas rebate programs. As with most things in life, these "free" perks do come with some caveats. "These are great cards — if you play them right," says Arnold. Here's what you need to know.

1. Read the Fine Print
For someone looking to save as much on gas as possible, the Discover Platinum Gas card seems like the obvious choice. It boasts up to a 10% cash-back bonus on gas purchases and up to 2% on everything else. Impressive, right?

But what the advertising giveth, the fine print taketh away. Turns out that the actual reward is 5% on the first $1,500 you spend on gas each year. It goes down to 3% on gas purchases from $1,501 to $3,000. For gas purchases upward of $3,001, the gas reward is a mere 1%. In addition, rebates are limited to 0.25% at discount stores, like Wal-Mart, and warehouse clubs, like Sam's Club. "There's a lot of red tape attached," Arnold says.

So where's that 10% they were advertising? You get the full amount only if you use your gas rebate to purchase gift certificates at one of Discover's retail partners, which include Bed, Bath & Beyond, The Sharper Image and Red Lobster. That's not a bad thing, provided you want to use your rebate to buy a cup of clam chowder. "It's a great deal if you like their rebate partners," says Arnold.

Another card that might disappoint you on closer examination is the popular MBNA AAA Platinum Plus card. This past summer, MBNA revamped its rebate program to encourage customers to user the AAA card for more than just gas. Whereas it used to offer 5% back on gas purchases, regardless of how much you spend on anything else, the rebate is now capped to 2% of your total monthly bill. So if you use your card only at the gas station, you'll miss out on the full rebate.

Arnold now advises his customers to look at Citibank's Dividend Platinum Select, which offers 5% cash back at stand-alone gas stations (those not affiliated with a mega-store like Wal-Mart), drug stores and supermarkets, and 1% back everywhere else. "It's my personal favorite," says Arnold. The only drawback: Citibank caps the cash rebate at $300 a year. Still, unless you're glued to your steering wheel, you aren't likely to go over that limit based on your gas purchases.

2. Consider Where You Buy Your Gas
The first gas credit cards were tied only to a specific gas-station brand, like Shell or Exxon Mobil. In other words, you got cash back only if you went to those stations. Today, there's no need to limit yourself — unless you really do happen to be brand loyal. In that case, a branded card could offer hefty savings. Citibank's Shell Platinum Select MasterCard, for example, gives a 5% rebate on purchases at Shell gas stations and 1% back everywhere else.

3. Think Twice Before You Transfer a Balance
Some rebate cards, like the Citi Dividend Platinum Select, promise you cash-back on balance transfers. For those who carry a balance, that sounds like a no-brainer — especially when 12 months of 0% APR is tossed in (as is the case with the Citi card).

But that might not be as great a deal as it sounds. What the Citi card doesn't tell you, for example, is that you get only a $5 bonus rebate for each $1,500 you transfer. That turns into a 0.3% rebate. In addition, the payments that you make each month will be applied to that transferred balance first, leaving you to pay interest on your most recent purchases — that is, until the entire transferred balance has been paid in full. Granted, this might still be a better deal than leaving your balance on your old credit card — but perhaps not as good as you had hoped.

Caveats aside, here are the details on four of the most popular gas rebate cards around.



Credit Card Rewards Annual Fee Interest Rate Requirements/Limitations
Citi Dividend Platinum Select

(The Citi Diamond Rewards Card has the same rewards structure. Points are redeemable for merchandise, travel and entertainment instead of cash.)
5% cash back on purchases at gas stations, supermarkets and drugstores, 1% on all other purchases. None 9.74% variable Annual cap on rebates: $300.
Chase PerfectCard 3% rebate on gas (6% promotional during first 90 days); 1% on all other purchases. $19, waived during first year; waived for following years if 9 purchases are made in previous year 14.24% variable Rebates are automatically credited toward future purchases
Discover Platinum Gas Card Up to 5% cash back on gas purchases (10% if redeemed for gift certificates with partnering merchants); 1% on all other purchases (2% with bonus partners). None 13.99% variable Rebate at discount stores and warehouse clubs limited to 0.25%. Gas rebate is tiered for gas purchases of $1,500 a year or more. Good for those willing to trade for a gift certificate at a partnering merchant.
AAA Platinum Plus (MBNA)

(Mid-Atlantic AAA Club members, click here for AAA Visa Diamond Advantage)
Up to 5% rebate on gas purchases only. None 9.9% fixed Gas rebate is limited to 2% of total net retail purchase transactions. Limit doesn't apply for Mid-Atlantic AAA Club members, but daily rebate cap is $2.
Source: Company Web sites