Pros and Cons of Using Fuel Cards

Operating expenses can eat into your bottom line for any sized trucking company. Therefore, finding ways to streamline your costs is essential to profitability. Fleet fuel cards are a great tool to maximize every fuel-up, especially with uncertain fuel prices. So, if you’ve considered a fleet fuel card for your operation, here are the pros and cons of putting one to work.

How do fuel cards work? 

A fuel card is a payment card that allows your operation to save with every business fuel up. How? It offers per-gallon fuel discounts. The larger your fleet, the more these per-gallon discounts can add up. Many fuel cards work similarly to credit cards, with each card having a maximum line of credit drivers can use to purchase fuel and other trucking-related expenses, including maintenance. However, other fuel cards work more like prepaid debit cards, with a balance loaded on each card. Once the balance is gone, the fuel card gets declined. But a fuel card can also have benefits that go beyond gas-pump savings.

Common advantages of fuel cards

A fuel card can be a great business management tool, allowing your company to save money with every fuel up and manage other aspects of your trucking business. Here are the most common fuel card advantages.

Per-gallon fuel savings and rewards

The most significant advantage of a fuel card is the fuel savings on diesel fuel. With per-gallon rebates, your operation can save with every fuel up. A commercial truck can, on average, consume more than $70,000 of diesel fuel per year. That can mean significant savings with per-gallon discounts. If you operate with a branded fuel card, your drivers may have to use in-network fueling locations to see the most significant discounts. In addition to fuel savings, many cards offer perks or rewards for cardholders.

Fuel spending control and fraud protection

Another benefit of fleet fuel cards is fuel spending controls. Many fuel cards allow fleet owners and managers to restrict fuel spending with robust controls. Whether you want to set daily total spending limits, geographic limits, number of fueling trips per day, or specific fueling time windows, a fuel card program can help. In addition, fleet cards can also require driver ID PINs, which helps prevent unauthorized or fraudulent use. A fleet fuel card can help your operation reduce excessive fuel spending while bolstering your bottom line.

Spending oversight

A fuel card can also show your entire fleet’s fuel spending in one place. These online accounts allow fleet managers to sort by vehicle, driver, and more. They can also send real-time spending alerts, helping your company stay on top of fuel spending no matter where you are. These dashboards can be powerful tools to help you fully understand your fleet’s spending, and you can see complete information for each transaction, including price, location, driver, odometer reading, time of day, and more. This can help you understand your fuel costs and give you insight into the most efficient routes, rigs, and drivers.

IFTA reporting

Beyond fuel purchases, fleet cards can streamline your office operations. Completing International Fuel Tax Agreement paperwork is crucial to running a successful fleet. This tedious process can bury fleet managers in paperwork, but a fuel card program can automate much of this work. Fleet card programs use the transaction data to categorize fuel expenses by state and then automatically generate IFTA reports, keeping you out of the back office and getting you back to managing your fleet.

Fuel expense management

Finally, trucking companies can streamline their expenses and reimbursements with a fuel card. Instead of collecting physical receipts and reimbursing drivers for fuel costs, they simply swipe their fuel card at the pump. For drivers, that means no more hassle with hard-copy receipts and filling out expense reports. For fleet managers, it means no longer worrying about tracking down drivers’ receipts and ensuring they are correct. Fleet fuel cards are the perfect solution to streamline your expense management process.

Common disadvantages of fuel cards

Fleet fuel cards can be an excellent tool for many company vehicle fleets. However, there can be a few downsides to consider. Here’s what you’ll need to consider when deciding on the right fuel card for your fleet.

Card fees

One disadvantage of fleet fuel cards is that they may have higher fees than business credit cards. In addition to setup fees, there can be annual or monthly fees. Some card providers also charge a per-card fee or a per-transaction fee. When considering fleet fuel cards against corporate credit cards, calculate the total cost of fees against the potential cost savings.

Limited merchants

Some fleet fuel cards are branded, which means they only work at specific fuel merchants or truck stops. In contrast, some fuel cards are universally accepted. The limited nature of fuel cards can mean drivers must veer off routes to use the fuel card at a partner fill-up station. Therefore, it’s necessary to consider at which merchants the fuel card program can be put to work.

Reporting metrics

Fleet fuel cards often offer great account management tools, fleet management software integration, and intelligent reporting. However, it’s crucial to scrutinize a fleet fuel card’s reporting metrics. You’ll want to ensure it offers the functionality and reporting parameters that make the most sense for your operation. 

How to choose the right fuel card for your needs

Fleet cards can be an invaluable tool for fleets. But to choose the right fuel card for your business, you should ask the following questions.

Where can my fleet use the fuel card?

The right fuel card for your fleet is one you can put to work at the right fill-up locations. Universal fuel cards are an excellent option for acceptance almost everywhere, while others only offer a preferred network of fuel stations and truck stops. Since your business needs to maximize discounts every time your drivers fuel up, having a card that matches your operation’s fuel preferences is essential. Compare these in-network gas stations and truck stops along your most frequent routes to ensure you choose a card that simplifies fueling instead of making it more difficult.

Which spending controls does this fleet card program offer?

Spending controls are an integral part of a good fleet card program. Therefore, fleet managers and business owners should consider the spending parameters each fuel card provider offers. From daily, weekly, and monthly transaction limits to geographic spending limits, a fleet card should provide essential controls to your business.

What other account management tools are there?

Using your fleet card program to manage your entire fleet is crucial. That’s why it’s important to understand all the account management tools available from the fuel card. From mobile app notifications, automated IFTA reporting, integration with fleet management software, and more consider which account management tools are essential and which you can live without.

What are the card’s fees?

A fleet fuel card isn’t a smart investment if it costs your fleet more than it saves you. As you choose the right fuel card for your fleet, examine the fee structure. You’ll also want to consider one-time fees such as setup fees and per-card fees.

Comdata offers the best fuel cards for your business

No matter the size of your fleet, Comdata can help you manage your fuel usage. When you put Comdata fuel cards to work for your operation, you’ll get industry-leading fuel discounts and spending controls, allowing you to optimize your spending. Plus, you’ll get detailed insights to help you manage your entire fleet. Apply now to put the Comdata card to work.