Also known as fuel cards, most business gas cards are quite easy to qualify for. They allow you to fill up the tanks of your company’s vehicle fleet while reporting your good payment behavior to the major credit bureaus.
If you’re looking to top up both your gas tank and your credit score, you’ll have lots of options to choose from. If you’re wondering, how they work, what benefits they have, and how to apply, then keep on reading.
What Are They
Business gas cards, also known as fuel cards, allow businesses to easily fill up their tanks, whether with one vehicle or several. As compared with the traditional credit cards, the borrowed amounts are smaller and they are easier to qualify for.
How They Work
Whenever you or your employees need to fill up your tank, you can simply swipe your fuel card instead of paying cash or using other credit cards.
Each card is usually linked to a certain fuel provider, such as Exxon Mobile, Conoco, etc. and their network of gas stations.
Your employee can also have their own cards that are linked to the same account, which makes it easy to calculate fuel expenses come tax time.
First up, company gas cards are pretty easy to qualify for and if you’ve requested a large limit, they generally will be unsecured rather than secured. They can also with extra benefits, such as discounts on gas prices, or car washes.
Extra cards can be doled out to employees, so all your fuel expenses are handily bunched into a single account.
The biggest benefit, however, is that they can be used to boost your business credit rating. Most fuel card providers report to the three major financial bureaus: Dun & Bradstreet, Experian Small Business, and Equifax Small Business. As long as your payments are made on time, they’ll pass along positive watch and outlook signals in their monthly credit reports.
How to Apply
What do you need to qualify for the business gas cards? As we mentioned before, it is an easy procedure, easier than for other credit cards. Usually, lenders ask for a good credit score. However, in the case of gas cards, they are usually a type of secured credit. This means that most likely you will not have your business credit score checked.
The gas card issuers undertake a small short-term risk in exchange for a service fee that you have to pay monthly.
Is getting a gas card worth it? If you don’t plan on making full monthly payments, the answer would be no, business gas cards are not worth applying for. Interest rates for this type of credit are higher than the average credit card. When desiring to maintain a balance, you’d be better off applying for a low-interest rate card and use it at the pump instead.
If you’re a new business in need of establishing credit, then you’re in luck, as gas cards have low qualifying requirements and offer monthly reporting to the three major credit bureaus. Like with Net 30 vendors, just buying what you need on a fuel card and paying your bills on time, will help boost your business credit score.