Advantages of Fuel Cards vs. Cash and Credit Cards

More and more businesses are adopting fuel cards. They provide a secure, flexible payment method for company drivers to fuel up. 

But what is the difference between a fuel card and more traditional payment methods?

In this blog, we go over the most important differences. 

Cash and Credit Cards: Flexible Tools with Important Limitations

Many businesses still have drivers use cash or credit cards for good reason. 

These payment methods are flexible. They allow drivers to fuel up at a convenient location. They’re convenient and easy to learn. Some business owners may even take advantage of added perks like cashback cards. But they do have some very important drawbacks.

Disadvantages of Cash and Credit Cards for Fleet Fuel Purchases

  1. Vulnerable to Fraud, Theft, and Misuse: These payment methods are flexible but vulnerable. Once stolen, cash is likely gone for good. Credit cards offer some protection against fraud but don’t come with custom controls on fuel spending. And either method is vulnerable to potential misuse by drivers.
  2. Manual Expense Reporting: Cash requires drivers to collect receipts manually. Later, it requires even more manual data entry to record fuel expenses. Credit cards may offer some basic purchase records online but don’t record valuable mileage data.
  3. Lack of Real-Time Insight: Credit cards and cash mean long lag times between when a fuel purchase is made and when it can be effectively used. This lag means inefficient purchasing habits won’t be detected for months.
  4. No Options for Performance Monitoring: Without mileage data, these traditional payment options have no way to look at how efficiently drivers are using fuel. This risks leaving important information on the table. Mileage data can even help spot vehicles with maintenance issues. 

Fuel cards are designed specifically to address each of these limitations. Just like cash and credit cards, fuel cards are a fully scalable solution. You’ll see them in use at small businesses with a handful of vehicles and large enterprises with nationwide fleets. 

What is a fuel card?

A fuel card is an electronic payment tool. It looks just like a credit or debit card. Using it to purchase fuel simply requires a swipe at the fuel pump. 

The only key difference in using a fuel card is that it requires entering a driver’s personalized PIN number, along with an odometer reading. But there are a few more important differences behind the scenes. 

Corporate credit cards are for any type of purchase. A fuel card, by contrast, is purpose-built for buying fuel and maintenance services for company vehicles.

How do fuel cards work?

A fuel card is built around a private payment network of fuel stations. It can only be used at gas stations inside this network. But the best fuel cards will cover the vast majority of US gas stations (95%+). 

When a driver makes a fuel purchase, information about the purchase is automatically uploaded to the web. The business can check this data, generate reports, and manage cards via web portal at any time. Drivers have their own mobile app for managing their own cards. 

A fuel card offers some important benefits compared to traditional fuel payment methods.

Advantages of Fuel Cards

Like cash and credit cards, fuel cards are flexible. They can even offer rebates on all the fuel your business purchases! The best fuel cards will also solve some of the biggest issues with traditional fuel payment methods. 

  1. Better Protection for Your Fuel Spend: Fuel cards offer greatly expanded tools for protecting against misuse. In addition to automatic monitoring for fraud, businesses can set up custom limits on total spending, geographic areas, and time-of-day.
  2. Automated Fuel Expense Reporting: Fuel cards put an end to manual receipt collection and data entry. The data collected is fully accurate, up to date, and includes crucial mileage data. Reports can even be generated automatically. Fuel cards can dramatically simplify tax time.
  3. A Real-Time Fuel Tracking Tool: With fuel purchases uploaded near-instantly, businesses can track fuel spending in real-time. That means fuel use problems can be spotted and solved before they start adding to fuel costs for month after month.
  4. Performance Monitoring: With mileage data and analytical tools, fuel cards make it simple to track driver and vehicle performance. Poor mileage may indicate inefficient driving habits or a poorly maintained vehicle. 

Company Fuel Card or Not?

If you’re considering whether a fuel card is right for your business, be sure to consider the long-term value of each of the advantages listed above. Better spending controls that save just a few hundred dollars in misuse per month can add up to thousands in savings per year. Performance monitoring can help build a more efficient fleet than ever before. And all while dramatically limiting the risks that come with issuing cash or company cards. 

Most importantly, the best fuel cards offer all the resources support needed to be truly implementation friendly. The most business-friendly fuel cards can be implemented in as little as 30 days.