Business

What is a Fuel Card and How can it Work for Employees?

Fuels cards (also commonly known as gas cards or petrol cards) are alternative ways for drivers to purchase fuel for their vehicles. In other words, they are like store or payment cards assigned to a specific driver and vehicle and accepted by a number of major filling stations for purchase of fuel and related services like tyre replacement and glass repair.

Fuel cards can be very useful especially for high-mileage businesses as they make it easier to track spending, monitor fuel usage and process expenses for records and tax purposes in a more efficient manner. Below we highlight some of the benefits and challenges of fuel cards.

Benefits and Challenges

With fuel cards, high-mileage businesses such as hauliers and bus companies can keep a very close eye on their costs and monitor the bottom-line. This means that refuelling a company vehicle can be done as cheaply as possible through interest-free credit. Now here are the benefits and challenges:

Benefits

  • Time: allows businesses to save valuable admin time and money.
  • Rewards: drivers can take advantage of discount or fuel offers provided by the fuel card issuer
  • Budgeting: businesses can track fuel expenses separately thereby making it easier to budget
  • Security: since a fuel card can only be used for authorised purchases and restricted to a driver or vehicle, it isn’t prone to theft.

Challenges

  • Restricted Usage: this can be a pro (for security) or con, however in this instance, a con as restricted usage means that they can only be used at certain fuel stations or chains
  • High Rates: interests rates can be very high sometimes up to 10% higher than the national average according to Credit Karma.

Choosing the Right Fuel Card

Now that we know the benefits and challenges of a fuel card, and how fuel cards work, it is key to understand how to find the right one for your business. While it can often be challenging due to the number of available options, the following are 3 ways to start your journey and make an informed decision.

  1. Online: conduct an online search where you will be presented with a range of cards with key features highlighted.
  2. Direct: visit a fuel station and ask for an application form.
  3. Provider: contact a reputable fuel card provider and ask for information on how to make a standard application.

Following successful applications for all your drivers, you may be presented with a guide to the sites where the use of your selected fuel cards are valid. In addition, at the end of each week, the supplier can notify you of the following week’s discounted prices. With this knowledge in mind,  your drivers can refuel at any approved site to take full advantage of any benefits.

Conclusion

Whichever way you decide to apply for a fuel card, it is important to consider the benefits and challenges mentioned in this article. It is equally important to treat each provider that you find or are presented with on its own merit. Armed with this information, you can make the best decision for your business.

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