DEFINITION of ‘Fleet Cards’
A credit card that allows businesses to manage expenses associated with the vehicles that they own and operate. Fleet cards, also called fuel cards, are used to pay for the fuel, repair, and maintenance of vehicles, and are provided by a business to personnel who operate those vehicles.
INVESTOPEDIA EXPLAINS ‘Fleet Cards’
Unlike a corporate credit card, which can be used for a broad set of authorized purchases such as travel, fleet cards are designed to be used specifically for expenses related to managing vehicles. Companies may decide to issue a fleet card to each employee that is authorized to use company vehicles rather than have each employee use a personal card. This reduces the administrative expenses associated with maintaining a reimbursement program to pay employees for the money they use on gas.
Companies offering fleet cards may provide cardholders with the ability to review and manage the different type of expenses that the cards are being used for. This provides a level of oversight that lets businesses better manage their expenses, as well as identify cost-related trends that it should pay closer attention to. A business may use this information to adjust the limit placed on the card.
For example, a delivery business may issue a fleet card to each of its drivers to use to buy fuel and pay for maintenance. Since each fleet card is linked to an individual employee, the business is able to monitor how much each employee spends on his route, and can compare that number to the amount of miles that the employee is expected to drive. If it notices that a particular driver fills up his/her assigned vehicle more frequently than average, it may make a downward adjustment on the limit of the assigned card.