Kroger pulls a gas perk as pump prices set a September record

At a time when gas prices have hit seasonal record highs, Kroger has ended a partnership that will take away a key gas discount from customers.

And while the move was announced in July, it’s actually hitting now, when Kroger customers arguably need it most.

“The national average for a gallon of regular gasoline continues to climb, up nearly 5 cents from last week. At $4.48 per gallon, this is the highest the national average has ever been for this time of year,” AAA reported on Sept. 24.

That’s not a situation Kroger could have predicted in July, when it shared that its relationship with U.S. Bank was ending. This meant the Kroger Elite Mastercard, along with the benefits that come with it, would be terminated.

“U.S. Bank will transition credit card clients with The Kroger Co. co-brand credit card to a U.S. Bank Smartly Visa card, with U.S. Bank maintaining account ownership, servicing, and ongoing client relationships,” the bank shared on its website.

The new card is not affiliated with Kroger and does not come with the gas savings and other benefits the former co-branded card offered. U.S. Bank said the change “is expected to be completed this fall.”

It’s now fall, and Kroger customers are losing a key gas savings at a very unfortunate time.

Kroger credit card holders lose a gas benefit

Kroger shared more information on the credit card closure on its website, and not all the news was bad.

“Your Kroger loyalty account will remain active, and you will continue to earn Kroger loyalty points on eligible purchases when using your Kroger loyalty account number. Any earned Kroger loyalty points can still be redeemed for fuel discounts or grocery savings,” it posted.

Still, cardholders will lose a generous gas perk.

“However, your current 5¢ per gallon fuel savings at Kroger Fuel Centers associated with the Kroger World Elite Mastercard will end when your credit card account is converted or closed,” Kroger shared.

That benefit allowed all cardholders to save 5 cents per gallon, but grew to 25 cents per gallon for members who spent $6,000 a year on the credit card. In addition, to redeem the added discount, cardholders needed to redeem at least 100 fuel points.

The gas savings added up

If you spent $6,000 on the card in the previous year, you got the 25 cents per gallon discount. That means a savings of $2.50 for every 10-gallon fill-up.

Anyone below the $6,000 threshold received the 5-cent benefit, giving them a more modest $0.50 savings for that same fill-up.

The numbers aren’t huge, but the end of those benefits is coming at an unfortunate time, given where gas prices are now:

• Sept. 24 national average: $4.48 
• One week ago: $4.43 
• One month ago: $4.09
• One year ago: $3.16 
  • Source: AAA

“Typically, the start of autumn brings lower gas prices, but lingering volatility in the Strait of Hormuz and the high cost of crude oil are driving up pump prices. This month is on track to set a new September record. So far, the average for this month is $4.30, higher than the previous September record of $3.83 set in 2023,” AAA shared.

Kroger credit card holders lose other key benefits

The loss of the Kroger credit card also means that cardholders will lose other Kroger-specific benefits.

“The Kroger card offered 5% cash back on the first $3,000 in eligible Kroger Pay purchases each calendar year, dropping to 2% afterward. Eligible mobile-wallet purchases had a separate $3,000 annual limit for 5% rewards, followed by 1%. Those benefits will disappear with the conversion,” Consumer Affairs reported.

Replacement cards, which will not be branded to Kroger, will come with their own benefits.

More Kroger:

• Kroger makes a pricing move Costco and Walmart will love
• Kroger hit by 19 million egg recall over serious health risk
• Kroger supermarkets add exclusive LTO Sprite soda

“The replacement card offers 2% cash back on eligible purchases, with full value available through qualifying redemptions, including statement credits or deposits into eligible U.S. Bank accounts,” the site reported.

Kroger cardholders don’t have to do anything to receive the new card. It will be an automatic conversion, and their old card will be closed when their new one is activated.

Related: Major coffee chain is closing 250 stores across North America

Kroger just launched a replacement card

Kroger did not comment on the end of the co-branded credit card in its most recent earnings call.

It has, however, quietly launched a new card.

“If you’ve opened the Kroger app recently, you’ve likely seen ads for the retailer’s new rewards credit card,” WCPO reported.

The retailer has also launched a sign-up page for the credit card, which shows its benefits:

• Earn a $100 Kroger reward after $750 in net spend on the card outside of Kroger channels within 90 days of opening an account; reward is redeemable for eligible grocery purchases only.
• $0 fee to transfer balances. Move balances to your new card with no transfer fee, for a limited time.
• Up to 5x points on Kroger’s site and app.
• 4x points at Kroger fuel pumps.
• Up to 3x points in Kroger stores.
• 2x points on dining, utilities and travel.
• 1x point for every $1 spent on all other eligible purchases.
• $10 Birthday Reward every year.

“Points earned through the card do not expire as long as the account remains open and in good standing. Points can be redeemed for money off gas or groceries — a shift from the old Kroger card, which offered traditional cash back,” according to WCPO.

Related: 43-year-old retail giant closing down, starts liquidation sale