Not only are fleet managers tasked with monitoring and managing their business fleet and employees, but they are also responsible for controlling and minimising costs.
Fuel costs comprise a large portion of any transport business’s monthly expenses. Fleet managers should, therefore, focus on reducing this considerable expense as much as possible.
This is where the question of whether to use credit cards or fuel cards fits in – both have unique advantages and disadvantages, which can help you improve your fleet’s fuel management.
In this article, we’ll look at the pros and cons and key differences of credit cards and fuel cards. We’ll also – using this fuel card vs. credit card comparison – help you make an informed decision when choosing which card best aligns with your business’s operational and cost management needs.
Advantages of Fuel Cards
Specialised for Fuel Purchases
A fuel card – as the name suggests – is specifically designed to purchase fuel. They are sometimes also used to pay for other fleet vehicle-related expenses.
Fuel cards are customised to cater to the unique needs and requirements of a fleet. Additionally, these cards offer detailed reports which allow for the monitoring and management of fuel expenses and consumption, as well as streamlined expense reporting.
Discounts and Rebates
Fuel card providers – depending on their agreements with third-party providers – provide cardholders access to a range of discounts, rewards and rebates when they purchase fuel.
Some providers, for example, negotiate discounted fuel prices with fuel providers, allowing users to take advantage of reduced, competitive fuel prices.
Over the long term, these savings, fuel discounts, and rebates can lead to noticeable savings which add up. Ultimately, this leads to savings on fuel costs and higher business profits.
Expense Tracking
Card providers send a detailed monthly transaction report to users, allowing fleet managers to always be informed about the expenses and purchases made on their cards.
Using this information, a fleet manager can track and break down expenses by fleet vehicle, driver and location. This makes it easier to monitor spending, analyse trends and ensure compliance with company policies.
These reports also make it easy to identify instances of unauthorised spending.
Enhanced Security
Fuel cards offer a range of unique safety features. Some use PINs, vehicle-specific restrictions and odometer readings, which means that misuse or unauthorised use of a fuel card can be prevented.
Not only does your company save money – as no income is lost to theft or fuel fraud – but the enhanced security features also provide fleet managers with greater peace of mind.
Streamlined Administration
Eliminating the need for paper receipts and manual expense tracking, the electronic records provided by fuel card providers are great for streamlining administration duties.
Many fleet managers know how time-consuming and burdensome administrative tasks can be. Using electronic records of fuel purchases and expenses reduces the time and resources spent on recording and analysing expenses.
Disadvantages of Fuel Cards
Though fuel cards are an excellent tool to monitor and control fuel-related expenses, they are limited in their use. Credit cards, for example, can be used to purchase a lot more than just diesel or petrol.
Fleet managers, therefore, will have to keep alternative payment methods as a backup to pay for other fleet-related expenses.
Advantages of Credit Cards
Versatility
Credit cards are a lot more versatile than fuel cards and are accepted for a wide range of expenses. Using a company credit card, drivers and fleet managers can pay for their fuel, vehicle maintenance expenses, repairs and accommodation when on the road.
They offer greater flexibility compared to fuel cards. Using one payment method, employees can pay for a broader range of vehicle and fleet-related expenses.
Emergency Use
Credit cards can be used in times of emergency when you need to immediately pay for other, non-fuel-related expenses. They can be used when a fuel card is not accepted as a payment method.
Should a driver have to pay for emergency repairs or accommodation, a credit card is readily accepted as a payment method. Fuel cards are not as readily accepted for anything other than fuel expenses.
Reward Programmes
Credit cards – depending on the provider – oftentimes provide enticing reward programmes or cash-back initiatives. Fleet managers can take advantage of the rewards scheme of their particular card to reduce costs, save money and enjoy additional benefits.
Not all credit cards have these perks, therefore, consider which credit card offers you the best rewards scheme or cash-back incentives before making your final decision.
Disadvantages of Credit Cards
Limited Expense Tracking
Unlike fuel cards, credit cards do not always provide you with the detailed reporting that makes tracking and monitoring fuel expenses so easy.
Because you’ll deal with and have to track different expenses on your credit card statement, recording and analysing expenses might be time-consuming. When managing large fleets and dealing with a wide variety of expenses, fleet managers might also find reporting – using their credit card statements – challenging and less accurate.
Lack of Control
Some credit cards may not offer the expense controls and added security features that fuel cards do.
This can lead to an increase in unauthorised transactions on your company credit card. Instances of fuel fraud and non-fuel fraud can lead to financial losses which can negatively impact your bottom line. It may also cause compliance issues.
Mixed Expense Records
You will also have to keep track of and monitor a range of different expenses if you are using your company credit card.
This makes identifying and allocating costs to the correct expense accounts difficult.
Fleet managers will have to spend extra time to distinguish between fuel-related and other expenses. This can complicate expense reporting and make decision-making and future planning more difficult.
Conclusion: Which is Best For Your Fleet?
Ultimately, it’s important to make the decision – to use either a fuel card or credit card to manage your fleet expenses – based on your company’s operational needs. Also, consider how this might impact your expense management requirements and cost-saving goals.
For a fleet manager who prioritises efficient fuel expense management, choosing a fuel card stands out as the preferred choice. They are restricted to fuel purchases and offer a range of discounts and rebates to help with your cost-saving strategies. Using a fuel card also allows for more efficient fuel expense tracking and a streamlined administration process.
Contact Crystal Ball to find out about our fuel cards, which are designed to be a valuable tool for fleet managers to monitor and manage fuel expenses. Our fuel card – in partnership with BP – offers businesses state-of-the-art fuel management capabilities, insights into your fleet’s performance, and access to thousands of UK fuel stations.
Book a demo today to learn more about how Crystal Ball’s fuel cards and fleet tracking systems can help you optimise your expense management and fleet efficiency, and help your business save money.