High Delinquency Rates on Government Cards

The U.S. House Subcommittee on Government Efficiency, Financial Management and Intergovernmental Relations has been studying the high delinquency on credit cards held by government employees. CardLine reports that Bank of America, Bank One, Citibank and U.S. Bancorp provided testimony on the problem. BofA has issued 1.5 million cards for the Department of Defense. DOD controls 48 percent of the federal government's travel budget—$4.8 billion in fiscal year 2000. The problem arises because government employees use the card for official travel, but then do not pay the card issuers. BofA has issued 1.5 million cards for the DOD, as well as 41 other government agencies. It has been writing off $2 million a month on an annual charge volume of $5 billion. Employees, not the government agencies, are responsible for paying the bills. Yet, the card issuers are prohibited from running credit checks on the government employees who are to be given the cards.