Fuel Cards vs. Credit Cards: What’s the Difference?

Last Updated October 1, 2024

Fuel is one of the costliest expenses for carriers and has only gotten more expensive in recent years. In fact, the average price for fuel increased from 30 cents per mile in 2020 to 64 cents per mile in 2022.

With costs so high, fleet managers and trucking business owners need to get creative about how they pay for these expenses. Many turn to fuel cards or credit cards to cover the immediate costs of gas, but which is better?

Let’s weigh the differences between fuel cards vs. credit cards help you determine the best cost-saving solution for your trucking business.

What Is a Fuel Card?

A fuel card is a special card truck drivers use to pay for gas. It works like a credit card, but it’s designed only for fuel and truck-related purchases. Instead of asking drivers to pay for their own gas and submit for reimbursement, a fuel card allows your business to cover the costs without the finicky back and forth.

Some trucking companies prefer fuel cards over credit cards because they can restrict purchases, ensuring drivers only spend the funds on authorized purchases. These cards also log additional data on price per gallon and mileage, allowing businesses to better understand their cost metrics. For example, if you aren’t sure how much to charge for fuel surcharges, this data can help you charge fair rates based on market conditions.

Differences Between a Fuel Card and Credit Card

Fuel cards and credit cards have several differences that could affect how you manage your finances.

Purchasing Restrictions

The most significant difference between a fuel card and a credit card is the ability to restrict purchases. Fuel cards are only designed to use for gas, certain pre-approved vehicle expenses, and sometimes truck maintenance. You can limit where your team uses the cards and what they can use them for. While this places limits on drivers, a fuel card reduces the chances of fraud and misuse.

Credit cards, on the other hand, are much more flexible. Your team can use them for a wider range of expenses, from meals to supplies. However, credit cards have more potential for abuse and untracked spending. It’s worth noting that many credit cards offer additional protections against fraudulent use, although this depends on the credit card provider.

Reporting

If you’re weighing whether to use a fuel card vs. credit card, know that fuel cards have more readily available reporting mechanisms than credit cards. Fuel cards send detailed transaction reports to your administrative team, giving you more insight into:

• Driver behavior
• Spending trends
• Fuel use

If you operate a large fleet, this data could help you spot expensive trends and improve profitability. Best of all, this data comes over in real-time, allowing you to make adjustments ASAP.

Credit cards generate monthly statements. If you want real-time data, you have to remember to check bank statements multiple times a day. Even then, these reports don’t provide granular details on fuel use, making it harder to track fleet-specific expenses.

Discounts

One of the biggest perks of using a fuel card is the potential for discounts. If your drivers frequent the same gas stations regularly, using a fuel card for that gas station could allow you to score discounts of a few cents every gallon. These discounts add up over time, steadily trimming business costs every time your drivers refuel.

Credit cards don’t offer specialized discount programs like this, although many offer rewards or cashback programs. Weigh the pros and cons of each program to see if you’ll save more with fuel cards vs. credit cards.

Fees

Fuel cards often charge fees. Some charge a simple flat-rate fee per user per month, while others charge a range of percentage-based fees. Not all credit cards charge fees, but some do. Either option could come with fees that cut into your profits, so read the fine print carefully.

In-Summary: Fuel Cards vs. Credit Cards

Both fuel cards and credit cards have their pros and cons. Deciding to apply for a fuel card or credit card depends on the nuances of your business, as well as personal preferences.

Fuel cards are best if:

• You want more control over drivers’ expenses.
• You’re worried about fraud.
• You want more detailed reports on fuel use.
• You want fuel-specific discounts.

Credit cards are best if:

• You want to give drivers more flexibility.
• You’re an owner-operator who needs to simplify expense management by using one card for all expenses.
• You’re okay with a more generalized rewards program.

Looking to Improve Working Capital for Your Trucking Business? Try Freight Factoring

In addition to fuel cards, there are many other ways to save some cash or finance a trucking business. Certain options like freight factoring prevent you from taking out loans or accumulating debt.

Freight factoring is a trucking industry-specific form of invoice factoring, where you sell outstanding accounts receivable to a third-party factoring company, such as altLINE, in exchange for an immediate cash advance against the value of each invoice. You can receive more than 95% of a factored invoice up front, helping you battle long payment cycles and unexpected costs without missing a beat. It allows you to focus on what you do best—keeping your trucks on the road without the stress of chasing down payments.

If you have any questions about how freight factoring works or whether it’s the right fit for your business, feel free to contact one of our representatives at (205) 607-0811 or fill out our free freight factoring quote form here.