<img height="1" width="1" style="display:none" src="https://www.facebook.com/tr?id=114819295626675&amp;ev=PageView&amp;noscript=1">
4 min read.

Fuel Card vs Credit Card - When to Use Each

Nov 8, 2018 8:50:00 AM

Company fuel card versus credit card comparison

When companies first explore their payment options, it usually comes down to a fuel card vs a credit card. Though both options solve many problems that fleets face, they have different pros and cons that your team needs to examine. To simplify your research, we’re breaking down both options to help determine the right fit. Learn more about the different types of fleet fuel cards

The biggest factor in the fuel card vs credit card decision

Though there are some finer distinctions, the essential difference between these two options is what can be purchased. With a fuel card, you can only buy two things: fuel and vehicle maintenance, which can be turned on or off. However, most companies choose the fuel only option with their cards because maintenance is handled separately.

In contrast, a company credit card can be used at almost any store, restaurant, or hotel, providing less security for your purchases. If you opt for this payment method, be sure that you are double checking each invoice to ensure all charges are legitimate.

Complete control with fuel cards

Since these cards were designed with fleets in mind, they provide more granular controls over your drivers’ purchases. You can set limits for gallons or dollars per transaction, day, week, or month to ensure that your drivers are not exceeding the company budget. Additionally, you can limit transactions to specific times and days to ensure your drivers are only refueling during scheduled hours. These adjustable controls allow you to find the right balance of security for your business and convenience for your drivers.

In addition to these controls, you are also able to set up email alerts that will keep your fleet managers in-the-know. You can opt to receive alerts for every transaction, or merely those that occur outside your usual parameters. This level of detail is not available with any other payment solution, and it is an additional way to protect and monitor your fleet purchases.

What if you need more purchasing flexibility?

For most fleets, a fuel card is the perfect way to keep your drivers fueled and ready while minimizing the risks of theft and fraud. However, there are situations where it would be better to opt for a company credit card instead. If your drivers often need to purchase food, beverages, or pay for a night at a hotel on the company dime, it may be better to issue a credit card to allow for this flexibility. However, this increases the chances for employee misuse and overspending, so many companies opt for the security of a fuel card while providing a “per diem” payment that their employees can spend on necessities while on the road.

Fuel card vs credit card industry trends

Though payment needs vary from company to company, here are some typical ways that specific industries will use both card products:

  • Sales fleets often spend more on hotel rooms and restaurants than fuel, so most opt for the flexibility of a credit card. However, some management teams prefer to keep fuel purchases on a separate invoice, so they may provide both cards to their sales team.
  • For construction companies, the card product decision will weigh heavily on how many non-fuel purchases their teams must handle. Often, crews will run to building supply stores to buy supplies or tools for a job. In this case, it would obviously be better to work with a credit card. However, some companies provide additional security by issuing fuel cards to all team members while trusting all supply purchases to a foreman or manager.
  • Industries with high employee turnover, including trucking and towing, are in a prime position to take advantage of a fuel card. The ease of issuing and cancelling cards, monitoring tools and best in class purchase controls are a good fit for companies with high turnover.
  • Over the road or long-haul truck drivers are perfect candidates for fuel card, and enabling the optional maintenance makes it easy to get back on the road when something goes wrong. Additionally, having an extra line of credit is a great solution for owner-operators or small companies, as it allows multiple avenues to cover necessary business costs.

Balance the risks and rewards.

Given the complexities of different business situations, your company will have to determine which option is best for you. The simplest way to decide is to look at what your employees need to purchase while on the job. Is the bulk of your spending for fuel alone? If so, you may want to opt for the security of a fleet card while providing a per diem or reimbursing drivers for food and accommodations. However, if your drivers consistently purchase food and lodging, you may elect to go with a company credit card instead. If you have any questions or want to learn more about a fuel card vs credit card, please reach out to us.

Learn about a company fuel card →

Topics: Fuel Cards
P-Fleet Staff

Written by P-Fleet Staff