May 24, 2023

A complete guide to fleet cards for small businesses

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Any business that deploys a fleet of vehicles faces a unique set of challenges. According to AAA, the average cost of operating just one sedan is $8,558 per year. When you multiply that over a fleet of two or more vehicles, those costs add up quickly, especially when you don’t have the right business cards or spend management tools to track your spend.

This is why businesses that provide employees with company cars turn to fleet cards (or fuel cards), which enable them to pay for fuel and other vehicle-related expenses. In this guide, we’ll walk you through everything you need to know about fleet cards—and more importantly, we’ll help you choose the right fleet card for your business.

What is a fleet card?

A fuel card, also known as a fleet card, is a charge card designed specifically to pay for gasoline at a gas station. Each card is tied to an individual vehicle or employee, and the cardholder is required to enter a driver identification number before completing a purchase. 

What are the benefits of using a fuel card?

Automated fuel spend tracking

Fuel cards typically offer reporting and tracking tools that give business owners visibility into the spending habits of each employee, which eliminates the need to require employees to manually track their spend at the pump and submit expense reports each month. 

These real-time reports also enable administrators to remediate quickly whenever an employee attempts to use their fuel card on an unapproved purchase or is re-fueling more often than the other cars in the fleet. This data also makes it easier for administrators to analyze spending trends and identify cost-saving opportunities.

More streamlined back-end operations

Since fuel cards can only be used on approved purchases, administrators can track vehicle-related spending in a single platform. Fuel cards also enable business operators to set parameters that prevent cardholders from inadvertently making unapproved purchases.

Some of the most common automated controls on a fuel card include:

  • Only approving gasoline purchases at the pump
  • Approving at-pump and in-store purchases
  • Limiting purchases to specific fueling locations
  • Varying spending limits depending on the fueling needs of each vehicle

Fraud protection

Fuel cards come with various security features designed to protect businesses from unauthorized usage and fraudulent activities. These may include:

  • Purchase restrictions: Businesses can set limits on what types of products or services can be purchased with the fleet credit card, such as restricting it solely for fuel purchases.
  • Daily/weekly spending limits: Establishing spending caps per day or week helps prevent excessive expenditures and potential misuse by employees.
  • Fraud monitoring and alerts: Many providers offer real-time fraud detection systems that monitor unusual activity patterns and send notifications if suspicious transactions are detected. 

How does a fleet card work?

Employees can use fuel cards just like they would use any charge card. They can swipe them at fueling locations to pay for gas and any additional purchases that your company has approved. Some fuel cards also offer discounts on gas prices, which can fluctuate depending on agreements in place with the fueling location and card provider.

Since most fuel cards are so similar to charge cards, it’s important to note that you’ll be required to pay the balance in full at the end of each billing cycle.

Steps to obtaining and using a fuel card

  1. Check your business credit. Your credit score will determine which fuel cards your business is eligible for. 
  2. Compare station service and additional perks. Some fuel cards offer perks that are suited for businesses with large fleets, while other cards are designed for smaller operations.
  3. Compare spend management tools. Many fuel cards offer a lot of tools. Even if you’re operating a small fleet of cars, look for fuel cards that enable you to create spend limits to prevent drivers from using the card on unapproved expenses and build custom expense reports.
  4. Apply online. You can apply for most fuel cards online, over the phone, or by mailing an application to the fuel card company. 

Typical fees associated with a fuel card 

The fees associated with owning a fleet credit card can vary depending on the provider. Some common fees include:

  • Monthly or annual card fees
  • Transaction fees for using the card at non-participating gas stations
  • Late payment fees if your account balance is not paid in full by the due date
  • Foreign transaction fees when making purchases outside of your home country

To minimize these costs, it's essential to choose a fuel card provider that offers competitive pricing and features tailored to your business needs. For instance, Ramp’s fuel card solution has no recurring domestic transfer fees.

Building business credit with fuel cards

Using your fuel card can be a highly effective way to build your business credit since it operates just like a charge card. Here are two ways you can use your fuel card to build your business credit score

  1. Maintain on-time payments. Simply paying your bills on time is a great way to build business credit with a fuel card. As the major credit bureaus see that you consistently make on-time payments, they’ll be more inclined to increase your credit score.
  2. Keep your credit utilization low. Resist the temptation to use every dollar available on your credit card each month. Creditors typically like to see a credit utilization ratio of under 30%.

Using Ramp to streamline fleet management 

Ramp’s Fuel Card is designed to help businesses streamline their fuel management process while providing cost savings and valuable insights into spending patterns. By combining the convenience of a fuel card with the benefits of a business credit card, this solution offers an all-in-one tool for managing your company’s vehicle-related expenses.

Benefits of Ramp’s fuel card

  • Universal fuel cards. Unlike most fuel cards, Ramp doesn’t penalize you for using our card at an out-of-network fueling station. Cardholders can use the Ramp fuel card at any station that accepts Visa. 
  • Comprehensive reporting. Track your fuel spend by driver, vehicle type, date, or everything all at once. You can also build reports with custom fields such as VIN numbers and odometer readings.
  • Cashback on every fuel purchase. With every transaction, you receive 1.5% cash back as a statement credit. 
  • Custom fleet controls. Ramp enables you to set controls that are automatically enforced when drivers use their fleet cards. You can create cards that can’t be used in certain categories, with certain merchants, or on any purchases that aren’t fuel or gas.

Ramp's fleet card provides a comprehensive and cost-effective way to manage fleet expenses, while helping businesses build their credit score. Ready to get started? Read more about Ramp’s fleet card solution for small businesses.

Growth Analyst, Ramp

Yash works on Growth at Ramp — leading verticalized go-to-market and product growth. He previously comes from an early-stage wildfire technology company and worked on product at Contrary Capital.

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