Wednesday, May 22, 2013

How I Bought Gas for $0.94/Gallon 

Some grocery stores such as Kroger and Tom Thumb have reward point programs. The reward points from these programs can be used to purchase fuel at a discounted rate. For example, Kroger runs a reward system where for every 100 points you get 10 cents off a gallon. Below is the breakdown:

Earning Grocery Reward Point
For every $1 spent = 1 pt

Redeeming Points for Gas
For every 100 pt = 10 cent off per gallon

The package deal for this reward system works similar to the combo deals sold at fast food restaurants. When earning points,you have to make a combo in order to get the discount. Yet, in order to get this "combo deal", you will first need a credit card that gives cash back for groceries stores. Chase Freedom and Discover both have quarterly cash back from grocery stores at 5%.  Blue Cash Preferred Card from American Express gives 6% back up to $6,000 of purchase.  Another option that gives reward points instead of cash back if you're into hotel points is the Amex Hilton Surpass. This card gives 6 Hilton points per dollar on groceries.  Next, go to the grocery store like Kroger, and purchase a variable gift card which loads up to $500  (There is a  $5.95 activation fee) like the one below with a cash back earning credit card like Blue Cash by Amex. . You will need to buy two of them for  $1011.90. 

This gives you over 1,000 Kroger points. Now, go to the Kroger fuel pump, and scan your loyalty card at the pump. It will give you the option to redeem all 1,000 points for a discounted price of $1/gallon. Select that option and pump away. 

Now, note that Kroger limits the amount of discounted gas you can buy up to 32 gallons. So unless you don't care about maximizing it, pump whatever you need.. But as I see it, pumping up to the maximum gives the highest value.

Price of Gas =$3.469/gallon
Discounted Price of Gas =$2.469/gallon ($1 off per gallon after redeeming grocery reward point) 
Total Gas Pump to Maximum = 32 gallons which costs $79.00
Total Cash Back Earned with Amex = $60.71
Cost of Gas $79-$60.71=$18.28
Net Cost of Gas $18.28+$11.9(gift card activation fee: I have to take this as a cost)=$30.18
Cost of Gas per Gallon = $30.18/32(gallon)=94 Cent

How to Liquidate the Gift Card 

According to this publication the Federal Reserve requires all pre-paid Visa or Master Cards to have PIN numbers from April 1, 2013

What does this mean? This means you can use the gift card like a debit card. Call the toll fee number behind the Gift Card pack and set up the PIN number. Then go to Wal-Mart, and get yourself a money order for $1000 using debit transaction. Wal-Mart allows for money order purchases with debit cards, but it will cost you a percentage. I prefer to use Wal-Mart Money Center Bill Pay Service in order to pay my credit card back using debit transaction: The bill pay service fee  is $1.00. For those who have Amex Bluebird, loading the Bluebird is free at Wal-Mart. 


  1. Thank you! TomThumb is having some crazy offers on gas right now in their online coupon system!