March 20, 2003
Visa charge cards
Q: The new US Bank Visa charge cards have arrived. These are not procurement charge cards that have made the news lately. We are personally responsible for the balances. But unlike the previous Diners Club cards, we now have strict instructions not to use these cards for personal purchases.
1) What are the costs to the government for us using the new Visa card for personal purchases? According to the instructions, we are personally responsible for all costs on these cards, and unpaid amounts will be reflected on our personal credit reports. We must file valid travel reimbursement paperwork in order to pay these balances. Is the government ultimately responsible for the balance on these cards, and hence their restriction on purchases? Is there a cost to the government for car rental insurance when using these cards for rentals? Please explain the restriction.
2) Given I have other "gold" cards with rental car insurance coverage and cash withdrawal privileges, what advantages does this card offer me, given all of these restrictions? I still file the same travel reimbursement paperwork, regardless of the credit card I use. Is there a disadvantage to using my own cards?
A: The spending restrictions regarding the new US Bank travel charge card are based largely on two factors: (1) A closer alignment with the Department of Energy and its travel card program, which does not allow personal charges of any type and (2) A need to cut down on delinquent accounts which were almost 100 percent the result of personal spending by Lab employees. While these delinquencies are not a true "cost" to the government, they can result in a loss of revenue to the Laboratory. And as the new US Bank Visa program is actually a contract held by the University of California, it is imperative that delinquencies from Lab employees are kept to a minimum in order to ensure the best possible contract performance. There is no cost to the government for the car rental insurance; it is simply a benefit of the corporate travel card agreement.
Not knowing the full benefits of your personal cards, I cannot comment on whether or not there is a "disadvantage" to using them. The brochure that came with your Visa card entitled "Visa Commercial Card Benefits Package" outlines all the benefits associated with this card. I would caution that in many cases in today's marketplace, personal credit cards may offer insurance coverage for personal rental car usage, however they may not cover rentals on travel being taken for an employer. The card company prefers to have the employer liable as the travel is being taken on their behalf.
Guy Sandusky, Project Leader/Travel Group