Fuel cards, also known as fleet cards, are used as an interest free payment method for purchasing discounted fuel (petrol & diesel) at a pre-set range of filling stations. The cards are available from a range of different suppliers, from the petrol/fuel companies, who supply branded fuels to UK filling stations (Shell, Esso, BP etc.), to independent issuers, who offer a range of cards which can be used in predetermined cross franchise stations for improved coverage.
Businesses that use several vehicles and pay out regularly for fuel (either in cash to their drivers, or via a company credit card) could benefit from a fuel card, such as hauliers, salesmen, taxi companies, logistics companies etc.
Fuel cards are currently restricted to business owners, and, on occasion, to self-employed individuals. However, there are some rewards and cash back credit cards widely available, which can offer considerable savings on fuel and other purchases.
There are a number of benefits available to businesses and employees, using fuel cards.
Fuel card issuers use one of two pricing structures, either the fixed/commercial rate or the 'pump' price:
Obviously cost is always an important issue in business, therefore with fuel card issuers offering different pricing structures, and different annual fees, it is important to take into account all the fees and discounts and applying them to your own business activities, to ensure you get the right card for you.
Many card issuers offer refuelling stations nationwide, but some restrict their users to urban areas, whilst others offer more of a discount at motorway refuelling stations, therefore again it is important to ensure you get the card that reflects your business practices.
Be sure to check that you and your company drivers will consistently exceed the card issuer's minimum fuel usage policy, if indeed they have one. If you do not meet any minimum, the card issuers could take back the card after a given period (usually a month or two) and you will be left looking for a more suitable fuel card.
Be aware that some fuel card issuers only offer discounts on diesel and not petrol, which is useless if you run a fleet of petrol cars, so always ensure that you are getting a good deal on the fuel you use.
Because a fuel card is a type of credit card (though the credit is often offered on a shorter timeline than conventional credit cards), the card issuer will want to know that you have the means to pay the invoices when they become due, and therefore may want to carry out a credit search on the business. However, if you do have a bad credit record, or no recorded credit history, there are some options still open. Some companies offer a deposit fuel card, where the card issuer will ask for an amount of collateral (usually equal to around 3 week's worth of estimated fuel costs). This deposit will be refunded to you if you end the contract, and may also be refunded to you if you pay all invoices on time (typically for around 6 months). Another alternative to the deposit fuel card is a 'pay as you go' or 'prepaid' card, where funds are placed on the card prior to use via a credit or debit card, or via direct debit from a bank account. Because there is no credit being offered with such a card, almost all applicants will be accepted. These schemes could help businesses to improve a bad credit history, or to firmly establish a good credit history.
Most fuel cards enable businesses to restrict, or expand, what their drivers can purchase at refuelling stations when setting up of the card. For instance, some can offer the ability to enable drivers to purchase oils, lubricants, Adblue, truck washes, tolls, and even HGV parking. Conversely, businesses can also restrict the amount of fuel a driver can place on the card, thereby effectively setting a fuel 'budget'. Whatever is included on the card, the invoices will always list the price (and VAT) of the fuel separately to allow for ease of accounting.
Some fuel card issuers do offer Europe-wide fuel cards, covering between 35 and 38 countries. In addition to this, some pan-European cards can also be used to cover such costs as repairs (in designated garages) and emergency breakdown & recovery services.
Card misuse/loss/theft - Always ensure that you check regularly that the spending on your fuel cards is genuine, as any misuse of the cards will more often than not leave you liable, not the card issuer. If one of your cards is lost or stolen, you should inform the card issuer immediately.
Interest free periods - Typically a fuel card issuer will invoice customers on a weekly or bi-weekly basis, which is shorter than a conventional credit card or company credit card.