Regan Brown
Fuel cards, also known as gas cards or fleet cards, are a convenient way for businesses to pay for fuel and diesel. They are designed to help businesses save money on fuel purchases and control expenses. The cost of a fuel card depends on the provider and the type of card. Some fuel cards charge a flat monthly fee, while others charge a per-card fee, which can become expensive for businesses with many drivers. There are also fuel cards that do not charge any monthly or annual fees. Some cards offer rewards and rebates, while others have hidden fees and penalties. It is important to understand the fee structure of a fuel card before choosing one for your business.
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What You'll Learn
Retail and cost-based pricing
Retail Fuel Card Pricing
Retail fuel card pricing is based on the price listed at the gas pump at a retail gas station or truck stop. This means you pay the retail price and receive a rebate later based on the number of gallons you purchased. The rebate is negotiated with your fuel card provider. The benefit of retail pricing is that you can choose the best price in the area. However, if you don't actively train your drivers to choose the cheapest places, you could be losing money. In most cases, fuel cards use retail pricing because of the wider availability of retail truck stops and fuel stations than members-only stations designed for commercial vehicles with fuel cards.
Cost-Based Fuel Card Pricing
Cost-based fuel card pricing is set using the market-related fuel cost provided by entities such as the Oil Price Information Service (OPIS). This means you pay the price determined by OPIS instead of the full retail price, which can be helpful when driving in places with high transportation costs. The benefit of OPIS plus fuel card pricing is that you don’t have to worry about drivers choosing locations because two cardlock locations within the same area will have very similar pricing because it’s based on the same cost base, OPIS. However, there is little explanation as to how cost-plus OPIS index prices are set or why they are changed.
Additional Costs
It's important to note that fuel cards often come with additional fees and interest, such as invoice fees, membership fees, account maintenance fees, card replacement fees, and transaction fees. While these fees are typically minimal, they can add up over time. Some fuel card companies may also charge additional fees for custom reporting or custom account projects.
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Transaction fees
On the other hand, some fuel cards may have hidden fees that are not disclosed upfront. These fees can add up over time, so it is important to carefully review the terms and conditions before signing up. In general, the cost of a fuel card depends on the provider and the type of card selected.
Retail fuel card pricing is based on the price listed at the pump, and you will receive a rebate later based on your fuel purchase. This type of pricing is common due to the wide availability of retail fuel stations. Cost-based fuel card pricing, on the other hand, is determined by market-related fuel costs provided by entities like the Oil Price Information Service (OPIS). This can be advantageous in areas with high transportation costs.
Some fuel cards may also charge additional fees for custom reporting or account projects. It is worth noting that certain providers may waive fees for select customers. When evaluating the cost of a fuel card, it is recommended to use tools that compare the fees of different cards to make an informed decision.
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Account setup fees
It is important to note that some fuel card companies may charge additional fees for custom reporting or custom account projects. These fees can add up over the lifetime of the account, so it is advisable to carefully review the terms and conditions before signing up.
Some fuel cards, like the Circle K Pro Fleet Card, do not charge monthly or annual membership fees, while others, like the ExxonMobil Business Pro card, offer high rebate rates for a small monthly fee. It is worth considering that some cards may have a limited network of fuel retailers, so choosing a card with a wider network may provide more flexibility.
Additionally, cost-based fuel card pricing, such as the model used by OPIS, offers a different pricing structure where the cost is set based on market-related fuel costs. This can be beneficial in areas with high transportation costs, potentially resulting in lower account setup fees.
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APR fees
Fuel cards, like any other credit card, come with an annual percentage rate (APR) that represents the cost of borrowing on the card. This is the yearly interest rate you will pay if you carry a balance, plus any fees associated with the card. The APR varies by card and is determined by the credit card company based on your credit score, with a higher credit score generally resulting in a lower interest rate.
When considering a fuel card, it is important to review the terms, APR, and benefits to ensure they align with your financial goals. Some fuel cards may have higher APRs than standard credit cards, and late payment penalties, inactivity fees, or transaction surcharges may apply. Additionally, co-branded cards with premium benefits may charge annual fees, while most station-specific credit cards do not.
To avoid unexpected costs, always read the fine print and be aware of any fees associated with the fuel card. These fees can include transaction fees, account setup fees, APR fees, check processing fees, program administration fees, and bank handling fees. While fuel card fees may seem small on a monthly basis, they can add up over time.
It is worth noting that some fuel card providers offer introductory APR rates of 0%, allowing you to carry a balance without incurring interest during the promotional period. However, once the introductory period ends, the variable APR will apply, and interest will accrue on any remaining balance.
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Custom reporting fees
The cost of a fuel card depend on the fuel card company and the type of card selected. Fuel card fees are usually small on a monthly basis, but they can add up over time. Some fuel cards may charge additional fees for custom reporting or custom account projects. These fees are often listed on the fuel cards' websites.
Some fuel card providers may offer basic reporting features at no additional cost, while others may charge a monthly or annual fee for access to custom reporting tools. It's important to carefully review the terms and conditions of the fuel card agreement to understand the cost structure, including any potential fees for custom reporting.
Additionally, some fuel card providers may offer customized reports as part of a premium package or as an add-on service. These customized reports can be tailored to meet the specific needs of a business, such as including additional data points or more detailed analytics. The cost of these customized reports can vary depending on the level of customization and the specific needs of the business.
Overall, custom reporting fees for fuel cards can vary depending on the provider and the specific needs of the business. It's important to carefully review the terms and conditions of the fuel card agreement to understand the potential costs associated with custom reporting features. By utilizing custom reporting tools, businesses can gain valuable insights into their fuel spending and make more informed decisions to optimize their fuel costs.
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Frequently asked questions
The cost of a fuel card depends on the fuel card company and the type of card selected. Retail fuel card pricing is based on the price listed at the pump, while cost-based fuel card pricing is set using market-related fuel costs from entities like the Oil Price Information Service (OPIS). Fuel card fees are often small monthly charges that add up over time, and some companies charge additional fees for custom reporting or projects.
Yes, the Circle K Pro Fleet Card does not charge monthly or annual membership fees and is accepted at most fuel retailers nationwide. The Shell fuel card also has no monthly fees, although there may be charges for late or carried balances.
The Blue Cash Preferred® Card from American Express is ideal for households that spend a lot on groceries, gas, transit, and streaming. It offers generous rewards in these categories, particularly at U.S. supermarkets and select U.S. streaming subscriptions. The ExxonMobil Business Pro Card is another option with some of the highest rebate rates for a small monthly fee. P-Fleet is also recommended for its transparency and lack of transaction fees.
