A fleet card works like a credit card except that it’s used to pay for fuel and other repairs and maintenance for company vehicles. Fleet cards are fuel cards that help the companies manage expenses associated with a fleet of vehicles. Businesses with 2+ company vehicles or that use 1,000 - 5,000+ gallons of fuel per month can qualify.
Before you apply for a fleet card make sure you know your personal credit score. This is because fleet cards often look at personal credit in addition to the qualifications above. NAV lets you check your credit score for free. You’ll also get 2 free business credit score summary reports.
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How Fleet Cards Work
When a company opens a fleet card account, its drivers and vehicle-operating personnel will be issued individual fleet cards. These employees will then charge all vehicle-related expenses - such as fuel purchase, repair charges, and maintenance fees - to their fleet cards. The overall bill will be paid by the company to the fleet card provider.
You can use your fleet cards at affiliated gas stations and maintenance facilities. Usually, fleet cards come with mobile apps so drivers and other fleet cardholders can easily locate in-network gas stations and maintenance facilities.
It’s therefore important for businesses to consider the number of accredited gas stations and maintenance options available for a certain fleet card provider before opening an account. This will greatly affect the accessibility and convenience of use of fleet cards.
In addition to discounts and convenience, fleet cards also provide a real-time reporting on purchases and other vehicle-related expenses to the business owners or fleet managers. This allows the business to manage and keep track their fleet expenses.
Fleet Cards at a Glance
|APR||15% to 20%|
|Monthly Cost per Card||From $0.00 to $10.00|
|Repayment Terms||Either bi-monthly or monthly|
|Average Gas Discounts||Ranging from $0.03 to $0.10 per gallon|
|Average Discounts on Repairs and Maintenance||Ranging from 10% to 15%|
Fleet Cards vs. Fuel Cards
A fleet card allows a business to purchase fuel and pay for repairs or maintenance within a network of authorized fuel and maintenance merchants. It can also provide detailed reporting for each transaction. A fuel card also allows the businesses to keep track of the transactions but its sole purpose can be limited to fuel purchase only.
There are costs associated with the use of both cards and in some cases a small business credit card may be a better option. However, both allow the company to enjoy discounts and rewards on their purchases. If neither of these cards seem right for your company fleet, it might be a good idea to check out freight factoring.
How to Qualify for A Fleet Card
Business owners or a company’s authorized officers are allowed to apply for this corporate credit card account on behalf of the business. In general, the business must be in operation for at least 3 years or more and must have at least $1 million annual revenue. Fleet cards normally require joint liability but can sometimes be company-only liability.
Regardless of industry, as long as the business has two or more company vehicles, using fleet cards will be more convenient compared to reimbursing employees for their fuel and vehicle-related expenses. Your business will need to have healthy cash flow that can pay for bi-monthly or monthly fleet card billing.
There are three criteria that your business needs to meet in order to get qualified for fleet cards:
- Must have at least 2 company vehicles
- Must consume between 1,000 to 5,000 gallons of fuel per month
- You need a payment card for vehicle-related expenses only
Other qualifications that may be considered include:
- Good personal and business credit history
- Positive cash flow
- Time in business may be considered especially for business-only liability
Fleet Card Terms and Costs
A company that has a corporate fleet card account may have an unlimited number of cards. However, some fleet card providers charge a monthly cost per card up to $10. Monthly charges are usually waived if the company can reach certain monthly thresholds, ranging from 1,000 to 5,000 gallons per month. Average APR ranges from 15% to 20%.
- Repayment Terms: Monthly or Bi-monthly
- APR: 15% to 20%
- Monthly Fee per Card: From $0.00 to $10.00
If the fleet card account is a joint-liability, the company and the business owners are equally responsible for late payment charges. On the other hand, only the company or business entity is responsible for company-only liability fleet cards.
If your business uses two or more vehicles for business-related purposes, and your company can consume between 1,000 to 5,000 gallons of gas per month, the use of fleet cards is a good option. Fleet cards are especially ideal for businesses that are looking for an alternative to regular reimbursements on fuel and maintenance and require a thorough reporting and analysis for vehicle-related expenses.
Before you apply for a fleet card make sure you know your personal credit score. This is because fleet cards often look at personal credit in addition to the qualifications above. NAV lets you check your credit score for free.
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Fleet cards provide in-depth and real-time reporting and analytics.
Restrictions can be placed on the type and amount of fuel allowed.
Helps drivers find in-network gas stations.
Each card can cost $10 per month.
Only useful if you use more than 1k - 5k gallons per month.
Typically requires 2+ regularly used company vehicles.
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