Fleet cards are fuel cards that help businesses manage the expenses associated with a fleet of vehicles. Specifically, a fleet card provides companies with discounts on gas purchases as well as on the repairs and maintenance of fleet vehicles.
Businesses that operate a fleet of motor vehicles – whether they be company cars or freight trucks – often rely on small business gas cards and fleet cards. Fleet cards are best for business that operate two or more regularly used vehicles and use between 1,000 and 5,000 gallons per month, on average. There are a lot of unique benefits that a fleet card offers over a small business gas card.
Another way to manage fleet expenses, is to use a small business credit card, like the Chase Ink Business Cash Credit Card. You can get employee cards at no additional cost, set spend limits, and earn cash-cash back on all employee expenses. With the Chase Ink Business Cash Card, you can earn up to 5% cash back and new card holders are eligible for a $500 bonus.
What is a Fleet Card?
A fleet card is a credit card exclusively used by businesses for the fuel, repair, and maintenance of company vehicles. They offer discounts with participating gas stations, mechanics, and maintenance facilities. Fleet cards are designed for businesses that regularly use two or more company vehicles and use between 1,000 and 5,000 gallons per month.
When a company opens a fleet card account, it issues individual fleet cards to its drivers and vehicle-operating personnel. Employees charge all driving-related expenses to their fleet cards, and the business is liable for paying the overall company bill.
Fleet cards offer “in-network” gas stations and maintenance facilities that card carries can choose. Mobile apps are provided to help drivers locate these gas stations and facilities. It’s typical to find fleet cards that have over 170,000 available gas stations and an equal amount of repair and maintenance choices. Business owners can view all of these locations prior to opening an account.
Only authorized business officers are allowed to open a fleet card account. A business owner or account principle’s social security number is usually required as part of the application. Fleet cards are normally considered “joint liability,” and the liability is shared between the company and the business officer or owner. Some fleet cards, however, allow for business-only liability if certain criteria are met, such as years in business and annual revenue.
Businesses can open a fleet card account with large oil and gas companies, such as Shell, Chevron, 76, and ExxonMobil, as well as by providers that specialize in fleet cards, such as Fleetcor, FleetCardsUSA, Fuelman, and more. Applications are filled out online, much like a small business credit card or a personal credit card.
A “fleet” is considered to be two or more company vehicles of any size and combination. Fleet cards allow owners or managers of a fleet to receive real time reports on purchases. Fleet card accounts provide companies with comprehensive reporting and oversight for their fleet of vehicles.
If you’re looking for a way to maximize rewards and manage expenses associated with company vehicles, try a small business credit card. With the Chase Ink Business Cash Card, you can earn up to 5% cash back on purchases, issue employee cards and set employee spend limits. New card holders are eligible for a $500 bonus.
Fleet Card Rates, Costs, and Terms
Typical Rates, Costs, and Terms of Fleet Cards
|APR||15% - 20%|
|Monthly Cost Per Card||$0.00 - $10.00|
|Repayment Terms||Bi-Monthly or Monthly|
|Number of Cards||Unlimited|
|Gas Discounts||$0.03 - $0.10 Per Gallon|
|Repairs + Maintenance Discounts||10% - 15%|
The number of cards on a corporate fleet card account is unlimited, which is similar to small business gas cards. However, each fleet card carries a monthly cost between $0.00 and $10.00. Monthly costs are waived if the corporate account reaches certain monthly gallon thresholds, typically between 1,000 and 5,000 gallons.
The liability for each card is held jointly between the company and the business officer or owner who opened the corporate account. Fleet cards won’t show up on someone’s personal credit report, but the business owner or officer is responsible for any late or delinquent payments.
In addition to discounts on gas, repairs, and maintenance, fleet cards provide businesses with vehicle management reports that tracks each vehicle’s mileage, cost per mile, and miles per gallon. Reports are used to increase driver efficiency and accountability.
When is a Fleet Card Right for Your Business?
Fleet cards can help company fleets of all shapes and sizes. Regardless of whether you run a construction company, delivery service, florist, or bakery, a fleet card account might be beneficial.
Most fleet card providers offer multiple options that provide solutions for fleets of all sizes. Fleet cards are designed for companies that operate more than two business vehicles and use more than 1,000 gallons per month. Further, fleet cards restrict payments to gas, repairs, and maintenance.
In addition to the three criteria above, make sure you answer the following questions:
- Are you looking for an alternative to employee gas reimbursements?
- Do you require more robust data analysis for your fleet usage?
- Do you have the cash flow to cover bi-monthly or monthly credit card payments?
If you answered “yes” to these questions, your company is a good candidate for a fleet card account. Remember that many fleet cards carry a monthly cost of $10 that’s waived if your fleet uses between 1,000 and 5,000 monthly gallons. Cards with higher gallon thresholds generally have higher discounts on gas, repairs, and maintenance.
If your fleet uses less than 1,000 gallons a month, you’ll need to either find a fleet card without a monthly fee or rely on a small business gas card.
Or, another good option, would be to use a small business credit card, like the Chase Ink Business Cash Card. You can track expenditure in real time using the Chase app and the card integrates with your accounting software, so you can generate an expense report in minutes. Prequalify online in minutes.
What are the Benefits of a Fleet Card?
At this point, you should feel comfortable with the idea of a fleet card and how it differs from a small business gas card. So, the next question becomes: What are the benefits of a fleet card?
There are three primary benefits of a fleet card:
Let’s take a moment to discuss each one of these three items in depth.
1. Reporting and Analytics with a Fleet Card
The biggest benefit of a corporate fleet card account is the reporting that the account provides. Business owners, officers, and fleet managers are given access to in-depth reporting and analytics that shows credit card transactions in real time. Not all small business gas cards have access to the same data.
Fleet card reporting is powered by fleet telematics. “Telematics” is a branch of IT that specializes in the long-distance transmission of information. Fleet card providers have telematics capabilities that allows for real-time fleet monitoring, as well as helps with the efficiency, effectiveness, and safety of fleet vehicles.
Fleet cards make available level III transaction data, which includes such information as item description, item ID, unit price, tax amount, commodity code, and more. Business owners and fleet managers can use a dedicated account portal to see card usage on a per card basis, as well as look at the usage of the overall fleet.This helps businesses get a better grip on fleet spending.
In addition to the transaction data, fleet cards use odometer prompting to help track mileage, cost per mile, and miles per gallon for each of the fleet’s vehicles.
For example, cardholders are assigned a driver ID that they enter at a gas pump prior to filling up. Once a driver’s ID is entered, a prompt appears on the gas pump’s screen asking for the vehicle’s odometer reading. The driver enters the number using the point of sale keypad and then pumps gas as he or she would do normally.
Each time a driver fills up, the odometer is tracked. From the fleet card’s central dashboard, a business owner or fleet manager can see how each vehicle performs in terms of miles per gallon and cost per mile.
2. Cost Savings with a Fleet Card
Fleet cards only allow authorized purchases at participating gas stations, mechanics, and other repair-related services. These expenses can be limited by the amount or frequency of transactions through the central dashboard, saving the company money.
What’s more, restrictions can even be placed on the specific type of fuel. For example, if you manage a fleet of diesel trucks, you can limit gas purchases to diesel only. This mitigates the opportunity for employees to use corporate fleet cards for personal use.
Overall, these financial controls stop fraudulent charges on behalf of employees. Even if the card is stolen, it poses less of a threat to your company than if an employee lost a general purpose credit card.
Fleet cards also offer robust discounts on gas purchases, repairs, and maintenance. Many fleet cards, for example, give users between a $0.03 and $0.10 discount per gallon, per card. Percentage discounts – normally between 10% to 15% – are offered on tires, general maintenance such as oil changes or tune-ups, necessary vehicle repairs, and other common fleet-related expenses. Jiffy Lube, for example, accepts most fleet cards and their discounts.
Since the business is liable for paying all transactions, it receives the benefits of the discounts.
3. Time Savings with a Fleet Card
There’s no need for expense reimbursements with a fleet card. Instead, the overall credit card bill is paid by the company each billing cycle. This reduces the amount of time spent on itemizing gas receipts and submitting them for approval.
Additionally, with the provided fleet card app, there’s no time wasted driving around looking for a gas station or repair shop. Instead, drivers can rely on GPS to find all of their vehicle-related needs. Further, most GPS systems show the gas prices of each available station, saving the fleet money, too.
Another good option to save you time is a prepaid card like Bento for Business. With Bento, you can preload funds onto employee debit cards, set spend limits and allow only fleet related purchases. Bento integrates with your accounting software, so create an expense report for each card in seconds. Try Bento free for 60 days with 2 free cards and no setup fees.
Fleet Card vs. Small Business Gas Card
Small business gas cards are similar to fleet cards in that they’re offered by the same oil and gas providers and usually have the same “in-network” gas stations. However, there are four major differences between fleet cards and small business gas cards:
1. Fees and APR
The majority of small business gas cards generally don’t carry a monthly fee. However, a select number of small business gas cards carry an annual fee, usually between $25 – $99 per year. While the fees on small business gas cards are less, they cards offer smaller discounts when compared to a fleet card alternative.
Small business gas cards generally have a higher APR than the fleet card alternative. It’s not uncommon to see small business gas cards with APRs as high as 25 percent. Fleet cards, on the other hand, usually have an APR around 15 to 20 percent.
2. Purchase Restrictions
Some small business gas cards can be used for purchases unrelated to vehicle upkeep and maintenance. Other small business gas cards limit purchases to gas stations and convenience stores only. This is in contrast to fleet cards, all of which allow for the purchases of fuel, repairs, and maintenance.
However, small business gas cards can limit purchases on a card-by-card basis. These limits place restrictions on both employee purchases as well as how much is being purchased.
3. Discounts and Rewards
Small business gas cards offer discounts on gas. However, the discount rate is usually around $0.03 per gallon, which is lower than the discounts on a fleet card. Small business gas cards also sometimes offer extra discounts for any purchases unrelated to gas. These small business gas cards might cap annual rewards at or around $300 per year.
General small business credit cards are also an interesting option if you’re looking for fuel savings. While they aren’t specific to gas, there are small business credit cards that offer 2x points for gas purchases as well as offer cash rewards. Check out our article on small business credit cards to determine if a small business credit card is right for your fleet needs.
Individual cardholders might be personally liable for small business gas card transactions. Even though you can have multiple small business gas cards on a single account, personal guarantees may be required for each new card.
If this is the case, small business gas cards don’t show up on personal credit reports, but each cardholder is responsible for any delinquent payments and fees. It’s also possible for liability to be held jointly between the company and the business owner, which is similar to a fleet card and doesn’t hold the employee liable.
Employees might also be required to submit expense reports for gas reimbursement, depending on the card. It’s important that there are internal policies set up to outline the responsible parties for credit card payment.
Fleet cards allow a small business to finance their fuel and maintenance expenses while also getting better reporting and controls. Overall, a corporate fleet card account is a good option for businesses with high gas usage, somewhere between 1,000 – 5,000 gallons per month. In addition, anyone who manages a fleet and wants better data and reporting, costs savings, and time savings might find a fleet card beneficial.
Another great alternative for small businesses, is a small business credit card, like the Chase Ink Business Cash Card. With a small business credit card, you don’t have any fuel usage requirements, you get employee cards for free, and you can set employee spend limits. Best of all, you can earn cash back rewards on all expenses and new card holders are eligible for a bonus of to $500 cash back.