Many businesses are taking advantage of the benefits presented by fuel cards such as fuelGenie, while other organisations rely on company or personal credit cards to pay for fuel. We investigate the difference between the two approaches and determine whether one solution is better than the other.
Are fuel cards credit cards?
Fuel cards are not credit cards, but they do share some commonality, in that the driver is not required to pay cash or have money deposited from an account immediately, with either solution. fuelGenie fuel cards provide a competitive credit facility, and businesses will require a credit check in order to set up an account. However, the overall purpose of credit cards versus fuel cards is different.
A credit card is specifically designed to provide a line of credit to purchase items immediately and can be used to purchase a broad spectrum of goods and services. A fuel card, on the other hand, is specifically designed to allow only for the purchase of fuel, oil and car wash. As such, the two types of card actually serve quite different purposes.
Individuals asked by their business to use personal credit cards to pay for fuel are in the worst position. They often have to wait to receive their statement, then make a claim for expenses. These expenses then, in many cases, have to be signed off by management or finance before the individual is finally repaid. This perhaps isn’t an issue if they only cover occasional business mileage. But for those whose job it is to be on the road every month, using a personal credit card can be less than desirable.
A better solution is when companies provide employees with dedicated business credit cards. This time the impact isn’t as heavy on the individual. The risk with this option is that the individual can also use the credit card for any other expenses or spending. This option is not available with fuel cards, which means more control for the employer. In most cases, the emphasis is still on the individual to record and reconcile the expense.
So why use a fuel card?
Even if the employee has wider expenses possibly requiring a credit card, the better option for fuel is still to use a dedicated fuel card, to ensure effective management, control and oversight of fuel spending.
Another key benefit is that a fuel card will offer an itemised online receipt automatically with each transaction. It allows the company to manage the process completely independently ensuring that mileage a driver covers is recorded, thus significantly reducing administration.
Some fuel cards will also have registration cost associated and may even require a business to pay for data. So it’s important to find the right solution for your business. With fuelGenie it’s all completely FREE, providing drivers fill up at a Tesco, Morrisons or Sainsbury’s fuel station.
Why is a fuel card better than a credit card for a driver?
Fuel cards save the driver time, potentially their own money and also offer the chance to earn rewards. For example, a fuelGenie card can be used alongside a supermarket store loyalty card to earn rewards points for the driver, which can then be translated into vouchers or savings.
Why is a fuel card better than a credit card for a company?
Fuel cards allow the employer to control costs by avoiding giving full access to company spending power, as is the case with credit cards. On top of that, the reduction in administration makes a considerable cost saving for any business.
A popular fuel card solution such as fuelGenie also actually encourages drivers to be more considerate as to where they are refuelling, so that they are getting better prices for the company at cheaper supermarket filling stations.
In addition, driver data such as mpg can be tracked to ensure each driver is driving and refuelling in the most economical and profitable way for the business. Those drivers not doing that can be easily identified and re-educated to improve profitability and business efficiency.