Benefits

There are a number of benefits associated with the use of charge cards by the Government:

• Administrative cost savings – The estimated administrative savings for the purchase card alone is $1.7 billion per year ($70 per transaction) when used in place of a written purchase order. No studies have been done to estimate the transactional savings of the other programs.
• Identification for discount programs – The GSA SmartPay travel card is required to obtain airfare discounts through the GSA City Pairs program, creating an estimated $3.6 billion in annual savings governmentwide.
• Agency refunds – Charge cards generate performance-based refunds for agencies.
  • Productivity refunds: based on the timeliness and/or frequency of payments to the bank (faster payments = higher refunds)
  • Sales refunds: based on the dollar or spend volume during a specified time period
  • Corrective refunds: payments made to the agency/organization to correct improper or erroneous payments on an invoice
• Others – Charge cards provide other less tangible benefits, including detailed transaction data, improved ability to monitor transaction details, travel insurance, as well as to eliminate the need for imprest funds or petty cash at the agency.