Mercedes Mullins
Fuel cards, also known as fleet cards or gas cards, are a convenient way to save money on fuel. They are primarily used by businesses that run vehicles to easily pay for gas and diesel. There are various fuel card companies, each with its own fees for transactions, account setup, APR, check processing, program administration, bank handling, etc. The cost of a fuel card depends on the company and the type of card selected. Retail and cost-based pricing are the two most common arrangements for fuel card pricing. Retail fuel card pricing is based on the listed price at the pump, and a rebate is provided later based on the amount of gas purchased. Fuel cards may also offer rewards and discounts, allowing users to earn points and redeem rewards.
| Characteristics | Values |
|---|---|
| Purpose | Control company expenses and save money in the long term |
| Who is it for | Companies with fleet vehicles |
| How does it work | Works like a credit card; employees use it to pay for fuel at stations, and the company pays off the amount at the end of each month |
| Prepaid fuel cards | Work like gift cards; preload with a sum of money, and employees use that money to pay for their fuel |
| Cost | Depends on the company and the type of card; usually between $2-$4 per card per month plus a setup fee of around $40 |
| Additional charges | Late payment fees ($30-$90), interest on overdue payments, returned payment fees ($40-$50) |
| Fee types | Transaction fees, maintenance fees, setup fees, late fees, etc. |
| Retail fuel card pricing | Pay the retail price and receive a rebate later based on how much gas you bought |
| Cost-based pricing | Fuel sites offer cost-plus pricing, which is different from retail stations or truck stops |
| Discounts | Some fuel cards offer discounts for a limited time or at select locations |
| Rewards | Earn points and redeem rewards, get cash back on purchases, etc. |
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What You'll Learn
Fuel card fees
There are two common types of fuel card pricing: retail and cost-based. Retail fuel card pricing is based on the price listed at the pump, and a rebate is provided later based on the amount of gas purchased. Cost-based pricing is offered by some fuel networks, where the price at the pump is different from retail stations.
It is important to carefully review the fee structure of different fuel cards before selecting one. Some providers may waive certain fees for purchasing a specific quantity of gasoline or offer cards with no annual or setup fees. Additionally, some fuel cards may offer rewards and rebates on fuel purchases, which can provide cost savings.
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Cost-based vs retail fuel card pricing
Fuel cards are an excellent way for fleet owners to save money on fuel and control company expenses. The cost of a fuel card depends on the company providing the card and the type of card selected.
There are two common types of fuel card pricing: retail and cost-based. Retail fuel card pricing is based on the price listed at the pump, and you will receive a rebate later based on the amount of fuel purchased. This is the most common type of fuel card pricing due to the wider availability of retail fuel stations compared to members-only stations for commercial vehicles. With retail pricing, you can choose the best price in the area, but if drivers are not trained to choose the cheapest locations, this flexibility can lead to higher costs.
Cost-based fuel card pricing, also known as OPIS plus pricing, is set using the market-related fuel cost provided by entities such as the Oil Price Information Service (OPIS). With cost-based pricing, you pay the OPIS-determined price plus state and federal taxes and a fixed fee set independently of the pump price. This pricing model is beneficial when driving in places with high transportation costs, like California or Hawaii. Cost-based pricing is also advantageous as two cardlock locations in the same area will have very similar pricing. However, there is a lack of transparency regarding how OPIS index prices are set and changed.
When deciding between retail and cost-based fuel card pricing, it's important to consider market conditions and the regions your fleet serves. Retail-minus pricing is generally more transparent and preferred by fleet managers operating nationwide, while cost-plus pricing tends to save more money in areas with higher fuel transportation costs.
In addition to the pricing structure, it's crucial to consider the fees associated with fuel cards. These fees, such as transaction fees, maintenance fees, setup fees, and late fees, can add up over time. Some fuel card companies may waive certain fees for purchasing a specific quantity of gasoline or as incentives for select customers. It is recommended to carefully review the fee structure of different fuel card providers to make an informed decision.
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Fuel card discounts
Fuel cards can be a great way for fleet owners to save on gas and control expenses. While the cost of a fuel card depends on the company and the type of card, they often come with a range of discounts and benefits.
The TCS Fuel Card, for example, offers discounts on diesel, as well as access to a range of products and services catering to truck drivers' daily demands. TCS also offers zero transaction fees at in-network truck stops. Similarly, the Mudflap Fleet Card offers huge diesel discounts and is recommended by 94% of owner-operators and fleets.
The Fleet One EDGE Card provides access to the WEX EDGE savings network, which offers discounts on major tire brands, wireless plans, repairs, hotels, and more. The EDGE Discount Sites include Pilot Flying J, TA, Petro Stopping Centers, and many more.
The P-Fleet CFN fuel card is geared towards trucking businesses in the Western US and offers cost-plus pricing at 3,000 discount locations. The billing period and payment method for P-Fleet cards are determined after a credit application has been evaluated.
It's important to note that fuel card fees can add up over time, and some discounts may be limited to select locations or periods. However, with proper research and utilization, fuel cards can provide significant savings and convenience for fleet owners and truck drivers.
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Prepaid fuel cards
The main advantage of prepaid fuel cards is that they allow you to control how much is spent on fuel and stick to a budget. They are also a safer option than credit-based fuel cards as there are no interest charges, late fees, or debt risks. Prepaid cards can also be a good way to earn rewards and accumulate points, which can be redeemed for free gas, merchandise, or services.
There are a variety of prepaid fuel cards available, such as the Shell Refillable Card, which is accepted at 15,000+ stations in the US with no monthly fees. The OTR Fuel Card is another option, accepted at over 8,000 locations with savings of up to $2.25 per gallon. AtoB offers a Mastercard prepaid fleet fuel card with discounts at 30,000+ stations and the ability to save on more than just fuel through their partner network. QuikTrip also offers QT Fleetmaster cards, which provide customizable fleet fueling services and savings of up to 5 cents per gallon.
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Fuel card rebates
Fuel cards are an excellent way for fleet owners to save money on fuel and control company expenses. They are also a great way to limit spending on gasoline and track costs across drivers and vehicles.
While there are many benefits to using fuel cards, they often come with hidden costs and fees. These can include transaction fees, maintenance fees, setup fees, and late fees. Fuel card fees are usually small on a monthly basis, but they can add up over the lifetime of the account.
One way to mitigate the cost of fuel cards is to take advantage of fuel card rebates. Rebates are typically based on how much fuel you purchase at the issuing brand every month, with the rebate amount increasing as you purchase more fuel. For example, WEX fuel cards offer a rebate of up to 3 cents per gallon for fuel purchased outside of their nationwide savings network. Similarly, Fuelman fuel cards offer market-leading rebates on gas and diesel fuel with every fill-up.
When choosing a fuel card, it's important to consider the rebates offered by different providers. Some providers may offer special rebates as incentives to sign up, which then revert to a standard rebate after the promotional period ends. It's also important to read the fine print, as some rebates may only be available at certain locations or for a limited time. By selecting a brand where you'll be purchasing fuel most often, you can maximize your fuel savings.
In conclusion, fuel card rebates can be a great way for fleet owners to save money on fuel and control expenses. By taking the time to research and compare different fuel card options, businesses can find the best card to suit their needs and take advantage of rebates to reduce their fuel costs.
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Frequently asked questions
Fuel cards, also known as fleet cards or gas cards, are used by businesses to pay for gas and diesel. They work like credit cards, with employees using them to pay for fuel at stations, and the amount paid off at the end of each month.
The cost of a fuel card depends on the provider and the type of card. Some providers charge a flat monthly fee, while others charge a per-card fee, which can be costly for large fleets. There may also be additional fees, such as setup fees, transaction fees, late fees, and interest on overdue payments. Fuel card fees are often small on a monthly basis but can add up over time.
Fuel cards allow businesses to control expenses by setting limitations on how much is spent, where, and when. They also provide regular reports on transactions, helping businesses keep track of their spending. Additionally, fuel cards can offer rewards and discounts, allowing users to earn points and redeem rewards when filling up.
