The credit card that earns 7% rewards

The Marathon Visa is a little different from typical gas station credit cards; it is both more complicated and more interesting, and it is complexity that get us to 7% rewards. Interested? Read on.

Most gas station credit cards deliver their rewards in the form of x cents off per gallon, usually with a cap of 20 gallons on the fill-up. The Marathon card markets itself that way, but that’s not how it works. First, you have to figure out what rebate tier you’re in. From the FAQ:

How do I determine my rebate tier?

Your rebate tier is based on the total amount spent in a calendar month using your Marathon
Visa card. This includes the total of your Marathon Visa purchases at Marathon and purchases
made outside of Marathon, such as grocery stores, purchasing airline tickets, etc.

Tier 1: Spend <$500, get $0.05 / gallon rebate

Tier 2: Spend $500.00-$999.99, get $0.15 / gallon rebate

Tier 3: Spend  $1000+, get $0.25 / gallon rebate

So if you spend a grand, you’re in the highest tier–that’s pretty straightforward. Where it gets a little odd is that rebates are earned on all Marathon purchases, not just gasoline. At least, that’s what it says in the FAQ:

How do I earn rebates?

Rebates are earned on all Marathon purchases. Your rebate tier will help determine how many
rebates you earn each month.

You might be asking yourself, “How do you award a $0.25 per gallon rebate on, say, a pack of cigarettes, a cup of coffee, and a pint of vanilla ice cream?” Good question, so let’s check with that FAQ again, since this is where it gets a little more convoluted:

How are my rebates calculated each month?

Your rebates are calculated based on a few factors. First, you will determine your Marathon
purchases in a calendar month and divide that total with the National Average Gas Price from
the previous month to determine your “gallons” purchased.

You will multiply the “gallons” purchased by the appropriate rebate tier to determine your
rebates for the month:

Total spent at Marathon / National Average Gas Price = Gallons purchased
Gallons purchased X rebate tier = Rebates earned

Where do I find the National Average Gas Price?
The National Average Gas Price can be found at the following website:
http://www.eia.gov/dnav/pet/pet_pri_gnd_dcus_nus_m.htm

So what happens is you take all your Marathon purchases–not just the gasoline, but the cigarettes, coffee, and ice cream as well–and divide that by the average price of a gallon of gas to come up with your calculated gasoline purchase amount. You then multiply that by the appropriate rebate amount, which is determined by the tiers we discussed above.

Let’s do a simple example. If you spent $1,000 on cigarettes, coffee, and ice cream with your card, and the average price of a gallon of gas is $3.50, your calculated gas purchase is a little under 286 gallons of gas. A $0.25 per gallon rebate on that amount works out to be $71.43, just a bit over 7%.

How are the rebates paid out? Not in cash, unfortunately. They send you $25 Marathon gift cards as you earn them.

Caveats: I don’t have this card, though I’m certainly thinking about getting it. I therefore can’t vouch for any of this working as described since I don’t even know anybody who has this card. I was just checking it out and ran the numbers and was pleasantly surprised to come up with 7%. Hopefully my calculations are correct.

I also don’t know what kind of credit line you’d get with this card. It’s issued by Comenity Bank, and they gave my wife a five-figure credit line on her Fuel Rewards card, but obviously that’s no guarantee of future results.

What do you guys think of this one?