Wednesday, January 8, 2014

How to buy Gas for Cheap, with Kroger Fuel Points

How to buy Gas for Cheap, with Kroger Fuel Points
I have mentioned before on how I bought gas for $.94 cent. But things have changed since then so I am doing  new post on it.
If you know about Kroger fuel point system, then you know how it works, for those who don’t know;  Kroger gives Kroger fuel point for shopping, normally its 1 fuel point for $1. Fuel points for pharmacy is always more than regular items. Kroger occasionally runs a promo on gift card purchase like 4X fuel point for gift card purchase. What one of the store clerk told me is they run the 4X promo before major holidays or specific day to celebrate for example, mother’s day or father’s day and before holidays etc.  
The idea is to leverage your  credit card, Kroger reward card, and gift card in order to make money and save money.
Things you need to know.
-It involves gift card purchase with reward earning credit card
-It involves buying items with gift card and selling the items
-You will need Kroger royalty card, probably two per household.
-Buying gas with reward earning credit card
Information on Kroger Fuel Point.  (below are few information; click on the link for more information)
How does the fuel program work?
The fuel program allows you to receive savings of up to $1 off per gallon on fuel purchases at Kroger and 10¢ per gallon at participating Shell Stations. You may redeem 100 fuel points at participating Shell Stations for a 10¢ per gallon savings. And you may redeem up to 1,000 fuel points in a single fill-up at Kroger for up to $1 off per gallon. For each increment of 100 fuel points redeemed at Kroger, 10¢ per gallon will be awarded. Program discount is good for one purchase of fuel, up to 35 gallons. Credit and debit card fraud prevention policies may limit transaction at the dispenser. Offer cannot be combined with any other discounts.
For example:
·         100 fuel points = 10¢ per gallon of fuel for 1 fill-up at participating Shell Stations.
·         100 fuel points = 10¢ per gallon of fuel for 1 fill-up at Kroger.
·         200 fuel points = 20¢ off per gallon of fuel for 1 fill-up at Kroger.
·         1,000 fuel points = $1 off per gallon of fuel for 1 fill-up at Kroger.
How do I earn fuel points?
There are three easy ways to earn fuel points in Kroger stores every day:
  • Spending on Groceries (normal exclusions apply): $1 in Groceries = 1 fuel point.
  • Double fuel points for Gift Card purchases (normal exclusions apply). For example, $25 in Gift Cards = 50 fuel points.
  • Non-federally funded Prescriptions: 1 Prescription = 50 fuel points.
        a. As of August 1, 2012, federally funded Prescriptions earn 1 point for every $1 of your out-of-pocket costs for new, transferred and refilled Prescriptions.
Do Gift Card purchases count toward fuel points?
Yes. Gift Card purchases count 2X toward your fuel points monthly balance, with the exception of Kroger and Kroger Family of Stores Gift Cards, Green Dot prepaid reloadable products, MoneyPaks, American Express Variable Load Gift Cards, Visa Variable Load Gift Cards, and MasterCard Variable Load Gift Cards.
How long do I have to use my fuel points?
Fuel points earned in a given month are available for use through the end of the following calendar month. Points do not combine across months. When filling up at a Kroger Fuel Center, you’ll always be offered the biggest discount available, based on each month’s fuel point totals available in your account. For example, if you have 200 unredeemed fuel points from January and 300 fuel points in February, the 30¢ per gallon discount from February will be offered on your next fill-up. The 20¢ per gallon discount from January will be available through the end of February. At participating Shell Stations you will only be offered 10¢ per gallon and redeem 100 fuel points.
Purchases from  regular Kroger, and Kroger Signature are coded by Credit card as grocery purchase, do not use Super Kroger, that is not considered as grocery purchase. There are two reward credit card that gives very good reward for grocery purchase one is Amex Hilton Surpass which gives 6X Hilton points for grocery purchase, other is Amex Blue Business which also gives 6X cash back up to $6000 of spend on grocery annually.  
The Credit Card that can for this process are
-Amex Hilton Surpass (for grocery purchase @6X, Hilton Surpass does not award 6X points for gas purchase from affiliated gas station, it only awards 6X from standalone gas station)

-Chase Ink Plus (for gas purchase @2X)
-Chase Freedom or Discover Card ( these give quarterly bonus I do not have these card, I am not sure if they earn 5X gas bonus for affiliated gas station purchase like from Kroger gas station)

- Amex Costco Cash Card - Amex and Costco Co-branded card gives 3X for gas purchase at any station. This is the only Amex card that gives 3X cash back on any station.
I am going to talk about the Kroger 2X fuel point promo since it’s the one that is available most of the time, will also show some math on the 4X calculation. The gift card that earns 2X fuel point are pre priced gift card, variable gift card like Kroger GC or Visa, MasterCard does not earn any fuel point not even 1X. I am not sure what is the maximum fuel points that can be earned in a month, but per Kroger there is no limit to how many fuel point you can earn.  I buy Kohl’s Gift card from Kroger, because I buy items from Kohl’s .
Let’s look at the calculation where we are redeeming all 2000 fuel points for the month.

-$1000 GC (Kohl’s) purchase from Kroger = 2000 fuel point
-1000 fuel point = $1 off per GALLON up to 35 of fuel
So if the current gas price is $2.99/gallon (in TX), 35 gallon would cost  $104.65, with $1/gallon off, the gas then at $1.99/gallon it would cost $69.65 that is $35 saving per fill. So with 2000 fuel point  you save $70.
-$1000 GC purchase will give you 6000 Hilton Honors (HH)using Amex Hilton Surpass card I value HH point at $0.05 cent so you are looking at $30 worth of points , or $60 cash back if you use Amex blue Business this is caped $6000 grocery purchase.
-So total spend in a month on Gas is  $139.30 two fill of gas, if used following card for gas you would earn
 -Chase Ink: 278 UR point = $2.78
 -Chase Freedom or Discover card quarterly 5% = $7

 -Amex Costco Cash Card 3% = $4.18
So your total spend on gas if used
                Chase Ink & Amex Hilton Surpass =$139.30-($30+$2.78) = $106.52
                                So you paid $1.52/gallon for 70 gallon of fuel
                Amex Blue & Chase freedom or Discover Card = $139.30-($60+7) =$72.30
                                So you paid $1.03/gallon for 70 gallon of fuel
               Amex Costco Cash & Amex Hilton = $139.30-($30+4.18) =$105.12
                                So you paid $1.50/gallon for 70 gallon of fuel

               Amex Costco Cash $ Amex blue = $139.30-($60+$4.18) =$76.12

                              So you paid $1.031/gallon for 70 gallon of fuel

The above Process might not work for everyone, as you will need to liquidate the Kohl’s gift card, by selling the item you purchase; there are risk involved as it might take some time for you to sell the items purchased. Please let me know if I have missed anything or something that is incorrect.  
My recent purchase receipt

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