Fuel cards also referred to as fleet cards are a payment method used to settle fuel payments. They operates pretty much like a credit card in that you present it at the point of payment at fueling stations to settle your fuel charges. Fueling cards remove the need for cash when paying for fuel and therefore increasing security.
Though the fuel cards looks very similar to a credit card, there are many differences in their administration and usage.
No Rolling Balances
Unlike credit cards, they do not have a minimum balance payment and a roll over. You are expected to settle the outstanding credit at the end of every period. This enables credit management as you are only able to consume fuel for an agreed period before payments. Therefore, they are not associated with credit crisis. If a client is not able to meet their monthly obligation, the service is immediately terminated.
Interest Free
Unlike credit cards that carry an interest charge, fleet cards are interest free. You only pay for what you have consumed at the end of the agreed period. However, some companies charge a nominal fee every month. Being interest free protects clients from high interest rates associated.
Restricted to Purchase of Fuel and Other Fuel Related Products
The card limit you to the purchase of only fuel. Some may allow you to purchase automobile products such as lubrication and car service. This restriction enables easier administration and better management of the fuel costs.
Payment Term is Shorter
In many cases, payment period is weekly. Some will request a fortnight or monthly payment of the fuel.
Can Customize For Daily Fuel Limits and Fueling Station Restrictions
Their fuel systems allows for company administrators to apply various customized fueling restrictions. The administrator can apply a daily maximum fuel limit for each car depending on the need. You can also restrict the fueling stations that a car can fuel from or even the region where the services can be used.
Fraud Liability is Usually with Client
In most cases, the liability associated with fuel cards is bore by the client. This is different from the credit cards where the default liability of a fraud is the issuing company. However, since they are restricted to fueling only, and you can determine maximum usage per day or per week, the fraud risks associated is much less.
Cancellation and Activation is not Instant
One of the major limitations currently faced by fuel cards companies especially in the UK is that activation and cancellation of the service takes some time. Unlike credit cards that activation is instant, it at time takes a few days before getting accepted in all related fuel stations. This also applies to cancellation. However, some companies are starting online activation and cancellation to speed up process.
Price and administration benefits
A major advantage of fleet cards is that you purchase fuel at a discount usually at the wholesale price. The fuel cards also have a royalty points scheme to reward client loyalty. Besides the cost savings, the fleet cards company provide systems and data that enable administration of the fuel expense to work better. They also provide statistics that are important for decision making especially for fleet related companies. Another advantage for companies is that the invoice provided to the company clearly indicates the VAT costs and thereby easing the process of tax recovery.
Fuel Cards is the leading Fleet Cards company in the UK. Our services cover a wide network of fuel stations across the EU region. Our payment system provides advanced reporting and customization features that greatly improve your fuel expense information, controls and reporting.
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