What is a Fleet Card?

Introduction

The price at the pump affects every other component of the economy. And Americans are feeling the pinch in their pockets: the average household spent fifteen percent of their annual income on transportation costs last year, according to a survey released by the American Bureau of Labor Statistics in September 2023. Whether you’re a householder, business owner, or fleet manager, keeping a tight rein on fuel costs is one pathway back to being in the black.

Finding efficiency in fuel cost and keeping drivers straight on company policy are two essential duties for any fleet manager. Technological solutions such as mileage tracking apps and fleet cards are one way to make those duties easier. Both integrate spending and payments with reporting metrics to give you a total view of your monthly, quarterly, or annual spending.

Defining fleet cards

What is a fleet card? Also known as a fuel card, a fleet card’s function is between a credit card and a prepaid gift certificate. A fleet card allows drivers to pay fuel and maintenance costs and forward the charge to their employer. They are corporate credit cards that have restrictions preventing their use on anything but gas or vehicle repair. [1] Fleet cards typically cannot be used for other expenses incurred on the road, such as lodging or meals.

Who issues fleet cards?

Fleet cards tend to be issued by financial institutions or gasoline companies. Some exceptions to this rule exist, but for the most part, fleet cards are only issued on large scales; banks and fuel companies both have the capital to handle large volumes of transactions on a daily or weekly basis.

Most fleet cards work only at a single gas provider. Issuers often offer businesses a discount on the pre-tax price per gallon or interest rates if issued by a bank or credit card company. 

This incentivizes fleet managers to partner with the provider. Drivers love not having to pay for business driving out of pocket, and business owners love keeping expenditures in one place and at a reduced price.

Here are some of the most recognizable names of companies that offer fleet card programs for businesses:

• 7-Eleven
• Shell
• Visa
• Mastercard
• ExxonMobil
• WEX Inc.

Why fleet managers love fleet cards

Fleet fuel cards offer fleet managers sophisticated tools for managing cash outflow. Some cards allow administrators to set daily, weekly, and annual spending limits to ensure drivers aren’t paying for more than they need while on the road.

That is before factoring in the discount at the pump. At scale, a few cents per gallon adds up to hundreds or thousands of dollars annually. When you combine the ability to set limits on the card with the raw price discount that most providers offer, fleet fuel cards can dramatically reduce overhead spending on transportation costs for nearly any business.

Customization and controls

Most fleet cards can only be used at a single provider or chain of gas retailers. This is the tradeoff that issuers provide in exchange for the discount on the gas price: a few cents per gallon off the top seems like a fair trade for guaranteeing the money isn’t spent elsewhere.

Providers may require a few extra hoops to be jumped through every time the card is used. Drivers may need to provide the vehicle serial number, fleet license plate number, or an assigned account number. These additional controls help businesses quantify expenditures and ensure that only authorized persons can purchase.

Integrating fleet cards with fleet management software

As fleet management software continues to evolve and grow, many fleet card programs offer a way of integrating raw purchase data with other fleet telematics, such as mileage or geolocational info. [2]

This allows fleet managers to view expenditures by driver or area to find possible efficiencies. Local fuel costs vary wildly, and the level of precision a fleet card offers administrators can provide a birds-eye view of where the money is being spent.

In the future, fleet managers may be able to set spending limits per mile traveled or set a daily quota to be spent along a driver’s regular route.

Fleet cards may be integrated as a standard feature of fleet management software sometime in the future, especially for companies that require fleets of thousands of vehicles.

Another way of automating gas payments

In conclusion, we’ve examined how a fleet card differs from a regular corporate charge card. You’ll have become familiar with standard American providers of fleet cards, learned about options that provide fleet managers additional customization and control, and looked at possible future pathways for fleet card integration with fleet telematics suites.

Cardata’s built a mileage tracking app that lets fleet managers automate real-time mileage payments. Our software enables drivers to submit reports from on the road and takes care of the payments for you. Click here to book a demo with us.

Sources

[1] Ultimate Guide To Fleet Fuel Cards | Forbes Advisor 

[2] What Is A Fleet Card | How Do Fuel Cards Work | FleetcardsUSA 

^{Disclaimer: Nothing in this blog post is legal, accounting, or insurance advice. Consult your lawyer, accountant, or insurance agent, and do not rely on the information contained herein for any business or personal financial or legal decision-making. While we strive to be as reliable as possible, we are neither lawyers nor accountants nor agents. For several citations of IRS publications on which we base our blog content ideas, please always consult this article: https://www.cardata.co/blog/IRS-rules-for-mileage-reimbursements. For Cardata’s terms of service, go here: https://www.cardata.co/terms.}