Getting a good gas cashback credit card is the easiest way to save on gas, bar none. With gasoline prices increasing every single day, everyone is looking for ways to save on driving. Since you probably can’t sell your car and get one of these highest mileage cars, the next easiest thing is to get a credit card that gives you a little extra cashback on gasoline purchases. At the moment, besides specific gas station branded credit cards, I think the two best options out there is an American Express card and a Discover card.

The best option right now has to be the American Express Blue Cash Card because it offers up to 5% on everyday purchases, including at gas stations, supermarkets, and drugstores. General purchases have the opportunity to earn up to 1.5% cashback. It was named by Kiplinger’s Personal Finance as the “best cash-rebate card” and plenty of people look to it as the best card in their wallet.

Other salient details of the card are that there is no annual fee (I won’t recommend a card with an annual fee unless there is a compelling reason) and they have a 0% introductory APR on purchases for up to 12 months.

A close #2 is the card my wife and I use, the Discover® Open Road(SM) Card. The Discover Open Road card is a consumer card, so you don’t have to play business owner, and it offers 5% cashback on both gas and auto maintenance purchases. Whereas the AMEX card only gave you 5% on gas (and other business-like services), this one includes auto maintenance. Unfortunately, the 5% cashback bonus is only on the first $100 of gas and auto maintenance purchases a month! (Thanks Joe!). This makes the AMEX card a much better card. However, one additional perk of Discover is that you can get anywhere from 5% to 20% cashback bonus when you redeem your cashback in the form of a gift card from one of their retail partners. I used to get double cashback when I sold stuff on eBay because I’d convert my cashback for gift cheques to various stores I frequented. This card also has no annual fee and does offer a promotional 0% APY balance transfer until June 2009. This the card my wife and I currently use for gasoline purchases, but given the new limitation we’ll probably look for another one.

Update: How could I forget the awesomeness that is the Costco TrueEarnings card? If you get the Costco TrueEarnings regular card, you get 3% cashback on already cheap gas prices. You also get 3% back at restaurants and 1% back on everything else. The only downside is that there’s an “annual fee” in the sense that you have to be a Costco member ($50 annual membership).

Beyond that, you have a few cards that give gimmicky 12 month promotional cashback offers or are specific to a particular gas station company. I am never a fan of the limited time promotions unless the offer is especially juicy and I don’t want to be tied to a particular gas station, I like freedom.

What gasoline card do you use?

There are five finance related accounts in the personal finance world that I think every single person must have and they should get it as soon as possible. They run the gamut of the obvious, an accessible checking account, to the not so obvious, a high yield savings account (as surprising as it sounds, this is not obvious to most people because they are amazed when I tell them you can get 5% from a regular savings account). So, please enjoy this list of five accounts you absolutely must have and three that you absolutely must avoid.

These Five Accounts You Absolutely Must Have

1. High Yield Online Savings Account

Number one definite must have account is a high yield savings account getting you at least 4%, at the very very least. If you assume inflation at around 3%, anything less and you’re losing money. Take your pick of ING Direct, FNBO Direct, Emigrant Direct, Citi, and you’ll get over 4%. My recommendation is that if you have a Citi or an HSBC bank account, go with one of them because your transfers will be instant between accounts. If you don’t, I use FNBO Direct but both they and HSBC offer 5.05% APY.

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Every year around this time, I don’t re-evaluate my reward credit cards but since a whole bunch of other bloggers do, I figured I might as well do the same. My basic strategy is that I don’t really want to use more than three or four credit cards and each one of the cards has to serve a distinct purpose in order to make it into my wallet. Here are the three that currently make the cut and why:

1. Citi mtvU Platinum Select – For Movies & Restaurants
Usually a points credit card is a deal breaker for me, I prefer cash all the way, but I can convert Thank You Reward Points into payments towards my student loan debt so for the benefits I let this one slide. I chose the Citi mtvU card because it offered 5% cash back on bookstores (Amazon.com included), restaurants, and movies. The mtvU card also has the added benefit of giving me points for good grades and paying my bill on time.

2. Discover Gas Card – For Gasoline
I wish the Citi Platinum Select MasterCard still offered 5% on gasoline and supermarket purchases but they don’t so we’ve resorted to using the Discover Gas Card in order to earn the 5%. At least the card looks cool, the card faces are this dark gray and the sides are a bright orange… giving it this slick new glow. Also another added bonus is that at some malls you can get a $20 gift card for ever $200 in receipts (where you paid with a Discover card) you turn in.

3. Citi Platinum Select MasterCard – For Supermarkets
Speaking of the Platinum Select card, I keep this in my wallet because it still offers 2% on supermarkets and drugstores (better than nothing I suppose) and because there really is no reason to cancel the card.

4. American Express TrueEarnings Costco Card – For Everything Else
I shop at Costco when I can and the only cards they accept are debit cards and their own American Express. This card doesn’t have an annual fee if you’re a Costco member (I don’t see a reason why you’d get it if you weren’t) and it gives you 1% on everything payable annually. It’s really just my catch-all card when I don’t get bonuses on anything else.

Is it me or have many of the 5% cash back credit cards begun to scale back their promotional offers? First, AT&T Universal Cash Rewards gets shut down (many of their customers never received the letter). Then, Citi Dividend Platinum Select decides to end the 5% promotion (I never got that letter) and scaling it down. Now the Discover Open Road Card, which offers 5% on gas and automobile related purchases, will be reducing their rewards as well. Now, the Discover Gas Card will only return 5% for the first $1,200 in gas and automobile purchases and 1% thereafter.

So, it’s not as drastic as the AT&T Universal Cash Rewards (card terminated) or the Citi Dividend Platinum Select (card offers completely revamped), but you now are limited in how much of a reward you’ll be able to get.

So what options do you have now if you want to get 5% cash back on gasoline? Well the Discover Gas Card is still a good option but you might want to get the Citi Driver’s Edge Card which will get you 6% at supermarkets, drugstores, and gas stations for a year (3% after) plus other automobile related perks (like $1 per 100 miles driven).

Revised Terms and Conditions (from the application):

REWARDS: Earn unlimited cash rewards on all purchases. Earn a full 5% Cashback Bonus on your first $1,200 in annual gas and auto maintenance purchases. In addition, earn a full 1% on all other purchases after your total annual purchases (including gas and auto maintenance) exceed $3,000; other purchases that are part of your first $1,500 earn .25% and other purchases that are part of your second $1,500 earn .50%. Combined gas and auto maintenance purchases in excess of $1,200 earn Cashback Bonus at the same rate as other purchases.