Fuel Cards vs Credit Cards: Which Should Your Business Use?

Managing a fleet comes with challenges – no matter whether you have two vehicles or 200. At the top of the list is how to pay for fuel and other vehicle-based expenses without losing control and adding extra costs and risk to your business.

Asking employees to pay their own way and claim expenses is an admin nightmare – both for you and your staff. You’ll simply end up with a growing stack of receipts that need to be checked and reconciled. 

Giving your drivers their own card to pay for fuel and vehicle expenses is a smart solution. 

The question is this:

Which card do you give them: a credit card or a fuel card?

When you’re trying to make your job easier, you may feel like any solution will do. But the reality is, the type of card you choose matters. It can have a serious impact on your bottom line, not to mention your time, resources, and the risk to your business. 

So, what is the difference between a fuel card and credit card? What are their pros and cons? 

Our guide covers everything you need to know to decide the best option for your business. 

The difference between fuel cards and credit cards

What is a fuel card?

A fuel card, also known as a fleet card, is a way to pay with credit for fuel and vehicle-related expenses of a fleet. 

The fuel card is attached to an account, just like a credit card. When the driver fills up, they simply swipe the card and the cost of the fuel is charged to the account. 

A fuel card can be used at specific branded fuel stations. Some fuel cards have larger networks than others – the best fuel cards will be accepted at over 90% of Australian fuel stations. 

When a driver makes a purchase using the fuel card, data is automatically uploaded to an online platform where the business owner or fleet manager can analyse the data, generate reports, and manage cards at any time. 

What is a credit card?

The classic go-to option for business finance, a credit card is a quick fix if you want to give your employees an easy way to make purchases on the go. 

You probably have one or two personal credit cards, so you know how they work. But for your business, there are annual fees, interest rates and other factors you need to weigh up before you hand them out to employees. 

Fuel Cards vs Credit Cards

We’ve weighed up the pros and cons of fuel cards and credit cards for the top factors fleet managers need to consider:

Risk of fraud and misuse

One of the biggest challenges facing business owners and fleet managers is how to give drivers the convenience of purchasing the fuel and vehicle-related items they need, when they need them, without increasing the risk of abuse or fraud to your business. 

A fuel card is designed to give you more control over purchases. Fleet cards can be assigned to a vehicle, or a registered driver. A driver card may be your best option if your driver always stays behind the wheel of the same vehicle. But if the vehicle is being used by different drivers, you can assign a vehicle card with driver PINs. This allows you to easily see which driver filled which vehicle and when.

You also have tighter spending controls than with credit cards. You can put spending limits on the card based on daily, monthly or per transaction values. Some cards let you limit spending based on the type of fuel, so it can only be used to buy diesel, for example.   

On the other hand, credit cards can be used for any purchase, which makes it easier to abuse the card for personal spending.

Pro Tip: Look for a fuel card that will flag unusual driver behaviour and suspicious card use (such as spending on a Friday and Monday), so you can cut the risk of fraud and misuse.

Ease of use

When your drivers are on the road, servicing customers, you don’t want to add another admin burden to their list. So, you want a card that’s easy for them to use. At the same time, you want to be able to access reports and manage the cards without adding hours to your working day. 

The benefit of a credit card is that everyone knows how to use it. They are flexible and simple. You simply swipe and go. 

A fuel card adds one extra step – the driver needs to add the odometer reading after they swipe the card. Aside from that it works just like a credit card. So, once you have educated your drivers on where and how to use the card, it’s just as convenient as a credit card. 

In fact, a fuel card saves the driver time. Because it records every purchase, there’s no need for the driver to collect receipts every time they spend, which saves them (and you) valuable time and hassle on admin. 

Speaking of admin…

Admin and reporting

Let’s face it – any card is better than dealing with a pile of crumpled cash receipts, but fleet cards have the edge when it comes to easier reporting. 

With a credit card, you need to manually sort through the statement for vehicle expenses, and you won’t have access to mileage data.

On the other hand, fuel cards typically come with the option of a simple easy-to-read report so you can keep track of fuel use and other vehicle-related purchases. You can even drill down into transaction data to see the vehicle and driver. 

Invoices are also ATO compliant, which saves time when tax reporting is due. 

Pro Tip: Look for a fuel card provider with easy reporting that allows you to compare the running costs of each vehicle, so you can streamline efficiencies with your fleet. 

Cost savings and discounts

How can you streamline the costs of your fleet and maximise savings? This is the number one question facing business owners and fleet managers. One of the main ways to achieve this is with fuel discounts. 

That’s where fuel cards come out on top. 

Depending on the fuel card, you can benefit from discounts on fuel from different brands. The more vehicles you have on the road, the more substantial the costs savings are for your business. 

Most fuel cards also offer exclusive discounts on vehicle-related expenses, from tyres and oil to glass, servicing, parts and more. 

And because you have access to comprehensive reporting, you can analyse spending and drill down to individual vehicles to identify opportunities for even greater cost efficiencies within your fleet. 

By contrast, credit card providers won’t offer discounted fuel nor savings on vehicle-related expenses. You may be able to benefit from reward points that can be redeemed with partners. 

Like credit cards, fuel cards come with some standard fees. Most providers charge a card fee as well as transaction fees, which vary depending on the card. And you will often need to pay a one-off fee to replace a lost or damaged card. 

Both credit cards and fuel cards will charge fees and/or interest for late payment and when you go over the account credit limit. 

It may cost more to have business credit cards over the long term simply because annual fees and interest rates can be high.  

Pro Tip: Take the time to understand any fees and charges for any business card. 

Which one should you choose for your business?

Credit cards can have their place in a business but when it comes to managing your fleet costs and reducing risk, fuel cards are a smart business decision. For any business with vehicles on the road, fuel is one of the highest costs. With a fleet card, the fuel discounts alone can add up to thousands in savings per year. Spend monitoring can help you build a more efficient fleet than ever before, while reducing the risk of fraud and card abuse. 

See how Fleet Card stacks up against other fuel cards.

Or contact our team of experts to discuss which fuel card is best suited for your business.