Credit Cards Charge Ahead With Rewards for Driving Electric

Electric vehicles have a ways to go before they’re as ubiquitous as their gas-powered counterparts. EVs made up a mere 2% of new U.S. car sales in 2020, according to the International Energy Agency’s 2021 Global EV Outlook.

But thanks to financial incentives for buyers, as well as automaker investments and government funding for electric-vehicle infrastructure, things could look very different within a few years. And credit card companies are scrambling to get in on the ground floor of a spending trend, before there’s an EV in every driveway.

U.S. Bank was one of the first major issuers to feature credit card rewards for EV owners, announcing in January 2022 that its cards that earn bonus rewards on gas purchases will extend that same rate to purchases at EV charging stations.

“We are proactively adding this reward to the U.S. Bank consumer and business card portfolios that reward for gas because we know many people are either in the process of purchasing an EV or considering an EV purchase in the future,” said Steve Mattics, head of U.S. Bank Retail Payment Solutions, in an email. Other major banks came on board after that:

• The Sam's Club® Mastercard®, issued by Synchrony, followed suit in May 2022, extending its 5% rewards rate on gas to EV charging stations (up to a cap).

• Wells Fargo joined the fray later in the year when it rolled out the Wells Fargo Autograph℠ Card, which earns triple points per $1 spent at both gas stations and EV charging stations.

• In September 2022, the Costco Anywhere Visa® Card by Citi started including EV charging stations as a 4X-back category.

• Chase got in on the act, too, specifically calling out EV charging as a first-time 5% bonus category for the Chase Freedom Flex® for Q3 2023.

• In August 2023, the Bank of America® Customized Cash Rewards credit card expanded its "gas" bonus category to include EV charging. The following month, the Alaska Airlines Visa Signature® credit card — also issued by Bank of America® — did the same thing.

On top of all those traditional banks, several new, smaller players in the credit card space have also debuted rewards aimed at EV owners. Here are some reasons that the trend is accelerating.

» MORE: NerdWallet's best credit cards for transit and commuters

EV charging became a distinct purchasing category

Bonus rewards for EV charging became technically possible a few years ago when the Visa and Mastercard payment networks added EV charging as a distinct merchant category code or MCC. Because credit card issuers use MCCs when deciding which purchases are eligible for extra points, this paved the way for EV charging as its own bonus category.

Of course, the MCC assigned to different EV charging stations may vary. Note that your credit card may classify EV charging as another kind of purchase.

» MORE: What’s it cost to fill up an EV?

EV investment is speeding up

Car companies are setting ambitious goals to dramatically change their vehicle offerings in the near future. This involves not just designing new electric cars, but also developing batteries and building factories.

“If you follow the money, the money’s being invested in EV,” says Brent Gruber, senior director of global automotive at J.D. Power.

But if you can’t charge an EV at home and don’t have convenient access to public charging stalls, you’re not going to buy an EV. Some automakers are working to alleviate this problem.

General Motors Co., for instance, is partnering with EV charging network EVgo to build thousands more fast-charging stations by the end of 2025. The federal government is also providing funding for an EV charging network through a bipartisan infrastructure law, which passed in November 2021. It allocates $5 billion to states to build a national EV charging network and $2.5 billion to increase EV charging access in rural and disadvantaged communities.

EV buyers may get financial incentives

Depending on where you live, you may be eligible for rebates and tax credits when you buy or lease an EV. The amount you could save depends on the program in your state or county, and there may be other limitations to keep in mind, including the price of the car and your household income.

Some local governments or utility companies also provide rebates or reduced electricity costs if you install an eligible home EV charger.

According to Gruber, tax credits can incentivize consumer behavior, resulting in a steeper rise in EV sales in the U.S., especially as more consumers have access to charging facilities in the next few years.

Cards that offer EV charging rewards

As noted above, multiple payment cards now specifically earn bonus rewards on EV charging, and there's also a wave of products from smaller companies that are promising the same:

• The U.S. Bank Altitude® Go Visa Signature® Card earns 2 points per $1 at EV charging stations.

• The U.S. Bank Altitude® Connect Visa Signature® Card earns 4 points per $1 at EV charging stations (up to $1,000 in spending each quarter).

• The U.S. Bank Cash+® Visa Signature® Card offers customizable rewards you can change each quarter, including the option to earn 2% cash back at EV charging stations.

• The Sam's Club® Mastercard® earns 5% cash back at EV charging stations (on up to $6,000 spent per year, then 1%).

• The Wells Fargo Autograph℠ Card earns 3 points per $1 spent at EV charging stations.

• The Costco Anywhere Visa® Card by Citi earns 4% cash back on eligible EV charging purchases for the first $7,000 per year (1% thereafter).

• The Bank of America® Customized Cash Rewards credit card earns 3% back in a category of your choice (from a list of options that includes EV charging stations) and 2% back on grocery stores and wholesale clubs for the first $2,500 of combined bonus category/ grocery store/wholesale club spending per quarter; after hitting that threshold, you’ll earn 1% back on these purchases.

• The Alaska Airlines Visa Signature® credit card earns 2 miles per $1 spent on eligible EV charging.

• The PenFed Platinum Rewards Visa Signature® Card earns 5 points per $1 spent at EV charging stations.

• The FutureCard Visa is a debit card, not a credit card, but it earns an unlimited 5% cash back on eco-friendly purchases, including EV charging, public transit, bikes, secondhand clothes and more

There are also new cards offering other eco-friendly benefits.

As for whether these kinds of cards are the right fit for you? That will likely depend on a variety of factors, including how often you use EV charging stations.

But keep in mind that if EV charging does (or might soon) represent a big part of your budget, you could also opt for a more general rewards card that earns a high flat rate on everything you buy. The Wells Fargo Active Cash® Card, for instance, earns 2% cash back on all purchases, EV charging included.

Credit cards that reward different ways to get around

Even before EV charging came onto the rewards scene, ground transport-related credit card rewards had been expanding beyond gas station purchases or, in the case of travel cards, rental car bookings.

A relatively new card from Citi — the Citi Custom Cash® Card — earns 5% cash back on up to $500 spent in your highest-spend category per billing cycle, from a list of several options. One of those options is "select transit," which includes things like bus lines, ferries, railways, subways, taxis and more.

Or there's the Blue Cash Preferred® Card from American Express. It earns 3% cash back* at U.S. gas stations, and it also offers 3% back on transit, which includes trains and subways, buses, cabs, ridesharing services, ferries, tolls and parking. Terms apply (see rates and fees).

Even if "transit" isn't specifically or conspicuously promoted as a bonus category for your card, it doesn't necessarily mean that your card can't help with your commute. Many cards, whatever they may earn rewards on, offer the ability to redeem those rewards for travel or transit expenses like trains, buses or cabs.

Among such products are Capital One’s family of Venture cards:

• The Capital One Venture X Rewards Credit Card.

• The Capital One Venture Rewards Credit Card.

• The Capital One VentureOne Rewards Credit Card - Miles Boost.