Below is a guest post by Evan Mullen.
GasBuddy is an app that helps you save money on gas. In this post, we’ll review the various features of the app, as well as analyze whether using the ‘Pay with GasBuddy’ feature is worthwhile.
GasBuddy Review
GasBuddy is a mobile app that includes features such as:
- Pay with GasBuddy: earn 5 to 20 cents per gallon when you use GasBuddy debit card. Getting the GasBuddy debit card is free.
- List gas stations in your area by current gas price.
- Get notified about recalls for your vehicle.
- Points and Challenges: complete challenges to earn points, such as reporting a gas price to the app. Use points to submit entries into a daily drawing for a $100 gas card.
- GasBuddy Gasback: earn cash back redeemable for gas on the GasBuddy debit card when shopping with select partner merchants (works similar to a shopping portal).
- Park with GasBuddy: find and book parking, which earns 5% GasBack.
- GasBuddy Drives: track driving and identify fuel-wasting habits.
- They also seem to have random in-app offers, such as this one I saw recently to get 3 months of free music with Apple Music and get $5 GasBack.
Pay with GasBuddy Analysis
This analysis focuses on the Pay with GasBuddy feature to determine whether it is more profitable to use Pay with GasBuddy instead of a cash back credit card.
Pay with GasBuddy is a program offered by GasBuddy where GasBuddy provides a debit card to pay for gas. It’s free to get a GasBuddy debit card. This card is linked to the user’s checking account, and using the card for gas has the following rewards structure:
- FREE Tier: Save 5 cents per gallon. There is no charge for this tier.
- PLUS Tier: Save 20 cents per gallon on the first 40 gallons per month, then 5 cents per gallon. Cost is $4.99 per month or $49 per year if paid in full.
- PREMIUM Tier: Get PLUS Tier benefits; in addition, get 24 hour roadside assistance. Cost is $6.99 per month or $69 per year if paid in full.
The standard offers available on credit cards are anywhere from 0% to 5% cash back on gas, depending on the card. Now, let’s see whether it’s worth using the GasBuddy card instead of a credit card. Let’s take a look at each tier separately.
FREE Tier:
The table below shows the gas prices at which it becomes more profitable to use a cash back card over the GasBuddy card’s FREE Tier (5 cents off per gallon):
| Cash Back | Gas Price per Gallon |
|---|---|
| None | Always use GasBuddy card |
| 1% | If under $5.00, use GasBuddy card |
| 1.50% | If under $3.33, use GasBuddy card |
| 2% | If under $2.50, use GasBuddy card |
| 3% | If under $1.67, use GasBuddy card |
| 4% | If under $1.25, use GasBuddy card |
| 5% | If under $1.00, use GasBuddy card |
Let’s take today’s national average gas price, which is $2.85 per gallon.  Let’s say my cash back on gas is 1%.  Since gas is under $5.00, using the GasBuddy card’s FREE Tier will save me more.
Let’s say my cash back on gas is 4%.  Since gas is not under $1.25, using my credit card will save me more than the GasBuddy card’s FREE Tier.
PLUS Tier:
The table below shows the minimum number of gallons per month you need to purchase for the GasBuddy card’s PLUS Tier (20 cents off per gallon) to be profitable over a cash back credit card, with the fee paid in full for the year ($49).  Note: this table is for a gas price of $2.85 (see full analysis for minimum gallon values for other gas prices):
| Cash Back | Minimum Gallons Per Month |
|---|---|
| None | 20.42 |
| 1% | 23.81 |
| 1.50% | 25.97 |
| 2% | 28.55 |
| 3% | 35.66 |
| 4% | Use cash back card |
| 5% | Use cash back card |
Let’s say my cash back on gas is 1%.  I’d have to purchase at least 23.81 gallons of gas each month using the GasBuddy card for the $49 cost of the PLUS Tier to be worth it. (Note: if you purchase the PLUS Tier for $49 and you end up not hitting 23.81 gallons for the month, don’t buy more gas just to hit 23.81 gallons!)
Let’s say my cash back on gas is 4%.  This means that even if I were to max out the PLUS Tier at 40 gallons for the month, I would still have been better off just using my 4% card and not paying for the PLUS Tier.
Summary
From all those examples, we can make some generalizations about the GasBuddy card:
- Based on current gas price of $2.85/gallon, the FREE Tier of the GasBuddy card is likely only beneficial to users who have credit cards that earn 1.5% or less cash back on gas.
- Based on current gas prices of $2.85/gallon, the PLUS Tier of the GasBuddy card is only beneficial on purchases of between approximately 20 to 40 gallons of gas per month. [On purchases above 40 gallons in the month, use a credit card that earns 2%+ instead and you’ll come out ahead. The gas above 40 gallons is determined by the FREE Tier’s table.] Since most of us are earning at least 2% cash back on all purchases, you’ll only save money with GasBuddy if you use 29+ gallons per month.
- The PREMIUM Tier is not considered, since the 20 cents per gallon discount is the same as the PLUS Tier. You’re essentially paying the extra $2/mo or $20/yr for roadside assistance.
You can read a lengthier analysis along with the derivations here.
Final Thoughts
The average price of gas in the US has not dropped below $1.69 per gallon within the past 10 years.  That statistic essentially makes the GasBuddy card’s FREE Tier useless to anyone earning 3% cash back or more on gas.
In the end, at current average gas prices of roughly $2.85, it only really makes sense for those with 20+ gallon per month usage and credit cards under 4% cash back to pay for the GasBuddy card’s PLUS Tier.
Even in the most optimal scenario that your regular credit card earns no cashback at all, savings from GasBuddy would be around $4 per month or $48 per year, after accounting for the monthly fee and using 40 gallons per month. (GasBuddy card earns $0.20*40 gallons – $49/12 = $3.92.) Most of us are earning 2%+ which results in significantly less savings.
Personally, I’ll be using the app for finding the best gas prices in my area, improving on the efficiency of my driving, and getting 5% cash back for parking. And also taking advantage of any random deals in the app I find useful.
Thanks to Evan Mullen for the guest post. He also wrote a guest post in April reviewing the Digs Savings Account.
PenFed cards get 5% back on gas anyways.. would there be any major advantage of the free tier of GasBuddy over this?
If gas is less than $1, yes. It’s shown in the table
I have never seen PenFed as a true 5% since their points are devalued when you use them.
I use it off & on. I like using it to look up gas prices before we travel or traveling anywhere mostly. Was a great help finding cheap gas while traveling.
I don’t use the card often since T-Mobile gives me 10¢ off a gallon a week for shell & it’s the cheapest option & using their card doesn’t count towards the amount you need to get gold.
How is this not a money maker at the Plus and Premium levels, as advertised on their website?
First 40 gallons a month earns at .20 cents a gallon, every month. This comes to $96 which exceeds the cost of the membership…What am I missing here?
How come 20 cents a gallon for 40 gallons earns you $96 per month. Its just $8 cash back.
I wasn’t clear… 8 a month over a year is $96
Because you have to link GasBuddy card to a checking account, so you can’t stack with credit card rewards. So while the Plus tier saves $8/mo if you buy 40 gallons, you sacrifice credit card rewards. E.g, if gas if $3/gal and you get 3% cash back on gas, you’d earn $3.60 on your 40 gallons. So you’d pay $5 to GasBuddy for Plus tier and give up $3.60 in cash back for a tot cost of $8.60. And you only save $8. So you’re better off just using your credit card without GasBuddy.
Ah I see. thanks!
Anyone know if you can join at the regular tier, then upgrade to plus at a later date?
Yes you can. I almost did it yesterday, in fact.
Does it work for Costco Gasoline?
I stopped using GasBuddy last fall after reading this. They are actively collecting and selling your data in a much more aggressive manner than most sites. If you care about privacy, you may want to read these.
https://arstechnica.com/information-technology/2018/09/dozens-of-ios-apps-surreptitiously-share-user-location-data-with-tracking-firms/?comments=1&post=35972655
https://guardianapp.com/research/ios-app-location-report-sep2018/
According to Texas AG Ken Paxton, Allstate created the “world’s largest driving behavior database,” which collected information on more than 45 million Americans after paying mobile app developers millions of dollars to secretly incorporate tracking software. The software was designed beginning in 2015 by Allstate’s data analytics unit, Arity, and integrated into several apps such as Fuel Rewards, GasBuddy, Life360 and Allstate-owned Routely.
Attorney General Ken Paxton Sues Allstate and Arity for Unlawfully Collecting, Using, and Selling Over 45 Million Americans’ Driving Data to Insurance Companies | Office of the Attorney General
My experience using their shopping portal has been extremely negative. I made several purchases at Staples before GasBuddy added a gift card exclusion but when I asked why my “GasBack” was negated they accused me of being a thief and closed my account. Not much a customer can do in an unregulated space like shopping portals.
yikes that’s a shame. Good to know these details for others considering to use the portal. I assume you can get better rates anyway using cashbackmonitor
Now do it with real gas prices: $3.75 at Costco and $4+ else where.
For the paid tiers, the full analysis includes gas prices ranging from $0.50 to $10.00 in $0.25 increments
There are only 10 states that currently have average gas prices over $2.89, so you’re in the minority. Now do it yourself with your West Coast gas prices.
Thanks for this. It would take me hours to figure these numbers out on my own.
Thank you for the review. I don’t think I’ll be going for it unless gas prices skyrocket.
I currently have the AmEx Cash Preferred with 3% at gas stations. My no-annual-fee Citi Double Cash is 2%. With gas close or just above the $2.50 break point, maybe GasBuddy Debit would be better.
However, Publix often has 20% off ($10 off a $50 card) select gas gift cards. As long as Shell is not much more than 3-5% (Fuel Rewards discount) more than other nearby stations, discount gift cards works for me almost all the time.