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 if credit card companies want to get in on the ground floor of a spending trend, they need to act before there’s an EV in every driveway.

Among major issuers, U.S. Bank has already dipped its toes in, announcing in January that its cards that earn bonus rewards on gas purchases will also earn that same rate on 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.

Several new, smaller players in the credit card space are also debuting rewards for EV charging. Here are some reasons why this trend is likely to accelerate.

Now a distinct purchase 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.

EV investment 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. New York has such a program, the Drive Clean Rebate.

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

Cards that offer EV charging rewards

Aside from U.S. Bank cards, there's a wave of products from smaller companies — such as PointCard Titan, FutureCard and a Bluedot debit card — that offer or plan to offer bonus rewards on EV charging. 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 credit card that earns a high flat rate on everything you buy, EV charging included.

Sara Rathner writes for NerdWallet. Email: srathner@nerdwallet.com. Twitter: @sarakrathner.