With the rapid increase in fuel prices, trucking companies are losing business. However, this can be avoided if they own a gas credit card.
Gas credit cards provide many benefits to the company, such as gas discounts, which help it to increase its productivity while minimizing the cost. Nevertheless, these cards have some minor drawbacks, which you should know.
As such, we have put together this guide to help you understand the benefits and drawbacks of using a gas credit card. So, without further ado, let’s proceed to the next section.
Benefits Of Gas Credit Cards
1. Provides Discounts On Gas Purchase
One of the most important features of gas credit cards is that it allows truckers to avail massive discounts on fuel purchase. Therefore, you can purchase oil, fuel, diesel, and petroleum from a branded gas station without paying a huge sum since the card gives you massive discounts.
This helps lessen the financial burden on the company and the truckers since they can use the extra money for other purposes. For instance, the truckers can use the extra money saved to purchase food on the way.
2. Sign-Up Bonus Programs
Most gas credit card companies offer sign-up bonus programs to businesses that give them various rewards if they maintain the monthly spending requirements. In addition, these sign-up bonuses can be accumulated and claimed in one go; therefore, the truckers can benefit greatly since this acts as financial aid.
3. Other Spending Rewards
Some gas credit cards can be used in specific stations and landmarks since they are considered to store credit cards. In contrast to this, traditional gas credit cards are accepted all over the world, which makes it easier to purchase gas from any station.
Therefore, this doesn’t limit truckers from enjoying various rewards and cash-back programs if they purchase gas from a new place.
4. Easy To Control And Monitor
Another benefit of owning a gas credit card is significantly improving the business’s management. Once you have made an online profile on the app, it will allow you to monitor the real-life transaction of the drivers. This will prevent them from cheating the company since each driver is given a limited amount to spend on fuel.
As such, they can’t spend the money to fill gas for their friends and family’s vehicles. Moreover, you can deactivate the card whenever it gets lost or misplaced by a driver. This prevents the business from incurring a heavy loss if the card gets into the hand of the wrong person.
Also, the card is PIN protected, so only those who know the pin can use the card for gas purchases and rewards.
5. Provides A Deep And Comprehensive Report
When running a small business related to transportation services, you must ensure that you prepare a detailed budget to avoid unnecessary expenses in the future. Maintaining a business transaction record is one of the most efficient ways of preparing a reliable budget.
Regular credit cards don’t offer such services; therefore, it becomes quite a challenge to maintain a thorough record of all the transactions. On the other hand, gas credit cards provide all the transactions in one place.
Log into your profile, and you can check the yearly expenditure of the business. This will help eliminate unwanted costs while you focus on growing the business.
Drawbacks Of Gas Credit Cards
1. High-Interest Rates
Most gas credit cards charge high APRs when you fill fuel for your truck. Sometimes, a card’s interest rate can go up to 29.99%, which can add a lot to your financial burden. To avoid this, you must ensure that you pay the balance regularly.
Apart from this, you can opt for a card offering a lower APR since that helps reduce interest rates.
2. Earnings Caps
Another major drawback of a gas credit card is that it limits the earnings you can gain from the rewards you collect in a year. The credit card company usually sets this limit to prevent drivers and truckers from exploiting the system to their advantage.
On that note, an individual can earn a high rate of rewards if it doesn’t cross the cap for that given year. Once it crosses the cap limit set on the card, the individuals can only gain a 1% cash-back reward each time they purchase at the local gas station.
3. Limited Rewards Options
Although gas credit cards offer a lot of financial aid to drivers in the form of rewards, the options are still limited, preventing users from enjoying them properly. For instance, you can only redeem discounts if you purchase gas or fuel. Therefore, this limits your option drastically as you can’t use the card to buy other items, such as food and essentials.
Additionally, the cash points you earn from the card can only be used for specific purposes such as redeeming gift cards, travel allowance, and statement credit.
A Gas Card Makes For A Smart Business Decision
A gas credit card is an extremely valuable and reliable financial tool that helps businesses significantly manage their expenses and reduce costs. Nevertheless, it would be best to remember that gas credit cards usually charge a higher interest rate; therefore, we highly recommend you pay the monthly balance to prevent financial burden. Also, you should thoroughly inspect your business model before signing up for a gas credit card since a well-prepared budget can help further reduce expenses.
If you plan only to redeem discounts, we suggest getting a store card since it has lesser interest rates. A general reward credit card is ideal if you want more rewards, but you should be prepared for the higher interest rates.