In the Trucking Industry, Fleet Cards are Driving ROI

Fleet Cards and ROI Driven by the Millennial Generation

As the quickest and largest growing segment in the world, the millennial generation is influencing how the rest of us are making choices and living our lives. For this segment, technology is in their blood, they are not afraid to use it, and their knowledge of it will only continue to grow as they do. The rest of the world will have to follow, and it starts with the money which for them, will not be paper. Millennials have grown up using an ATM card and mobile applications like Venmo and Square Cash as their “go to” methods for transferring funds.

This growing segment of people aged 19-35 will increase their use of cards and related technologies as they grow older—and their expectations around how card programs should work for them differs from previous generations’ expectations. — Visa

Technology and plastic is a way of life. Visa, Mastercard and Amex are brands that they rely on – expectations are considerable, and the card companies are listening — here’s why:

• Millennials use cards more than other segments.
• They’re more likely to apply for credit.
• Spending will increase as they age.
• They’re open to new and emerging payment products.
• They use cards for 57 percent of their spending, and with increasing wages and reduced debt, they’re an attractive target for debit and credit card marketing.
• They’re willing to migrate cash and other transactions to card products, when designed for their needs.
• They are also more likely to revolve and pay fees.

It is not just the credit card companies taking advantage of millennial demands, and it is not just the millennials taking advantage of card benefits. The trucking industry has recognized the advantages of credit cards for years, and their fleet cards are evolving to benefit the company, the end user and, most importantly, drive fleet ROI.

Why Using your Personal Credit Card for Business is a Bad Idea

Credit cards have always been a way to keep track of money spent. Many of us use them to manage our personal expenses from those expenses associated with our jobs. Before fleet cards existed, drivers were using their personal credit cards to purchase meals, hotels and fuel. Small fleet owners might even use personal cards to purchase equipment, supplies and daily expenses. While it might seem frugal and a good way to earn points and miles, it can actually have a very negative impact on your personal credit score and cause financial discrepancies which will lead to losses and even worse, IRS audits.

Suffice it to say, using a personal credit card to do corporate business is in no way efficient or positive for a fleet of any size and will most likely have a negative impact on fleet ROI overall. These are the top 4 reasons you should not use your personal card for business expenses:

1. It Can Negatively Impact Your Personal Credit Profile: It doesn’t matter if you have a perfect credit history. Charging a business expense to your personal credit card will only draw you closer to your borrowing limit, leaving you with little room for personal expenses or emergencies. Continually using a personal card for business charges will also have you maintaining a higher credit balance and further reducing your available credit ratio, a primary factor in determining your credit score.

2. You Won’t Be Building Business Credit: Putting any business expenses on your personal card will hinder your ability to build business credit, making it more difficult to attain a loan for in the future.

3. An Accounting Nightmare: Using a personal credit card to cover both personal and business expenses can set your accounting team up for a potential, yet avoidable, headache. When tax season comes around, you’ll need to deduct your business expenses. By charging both business and personal payments to your personal credit card, it’s going to be more difficult and time-consuming to go through and separate what may or may not be deductible.

4. You May Be Missing Out on Perks that Benefit Your Business: Your personal credit card probably rewards you for consumer purchases, incentivizing things like paying at the grocery store or eating out at a restaurant. But many business cards offer rewards and perks that align with your business spending. Think about your everyday operational purchases and the targeted rewards you may be missing.

Fleet Cards Will Help Your Fleet Grow

Thankfully there are companies like EFS that offer fleet card solutions to help handle it all. Regardless of the fleet size, EFS provides fleet cards that can benefit both the fleet owner and the driver, providing efficiencies and visibility that is sure to enhance fleet ROI. The obvious benefits of a fleet fuel card are the ability to track and control where and how fuel is purchased, but beyond that, these cards can also provide credit to fund your operations as well as financing solutions to help you grow. The Mastercard Fleet Card is the single card, dual network solution that leverages EFS’s controls for fuel purchasing, combined with Mastercard’s wide acceptance network for non-fuel purchases such as T&E expenses, emergency repairs, and more. For larger expenses like vendor payment, EFS offers a Fleet “Virtual Card.” The virtual cards also leverage the Mastercard^® Network and allow for a more secure vendor payment by enhancing purchasing controls and reducing the potential of fraud risk with certain paper-based solutions. EFS virtual cards are commonly used for vendor payments such as maintenance and repairs, emergency or road repairs, tolls, citations/fines, office supplies, insurance, licenses and permits, training/recruiting/advertising, truck/trailer parts, utilities, employment services and more.

It is clear that millennials are driving the way we are spending our money by encouraging the use of plastic cards and mobile apps. Additionally, by influencing how card companies are responding, fleet owners and operators are benefiting. The use of personal credit cards on the job has given way to integrated payables with the likes of fuel cards, fleet cards and virtual card solutions. The advantages include everything from highly secured invoice payments through Mastercard, tightened financial controls and improved back-office efficiencies, to maximized cost savings, enhanced visibility and a streamlined payables process. Fleet card solutions are smart business and your growing fleet ROI will prove it.

Resources:

https://usa.visa.com/partner-with-us/visa-performance-solutions/marketing-credit-and-debit-to-millennials-part-one.html

http://www.dentistrytoday.com/news/todays-dental-news/item/3053-using-your-personal-credit-card-for-business-is-a-terrible-idea