Does a Government Travel Card Affect Your Credit?

Many individuals wonder about the effect a government travel card might have on their personal credit. Government travel cards are issued to federal employees for official business expenses, raising questions about how these unique financial tools interact with an individual’s personal credit history. Understanding the specific mechanisms and responsibilities associated with these cards can clarify their impact on one’s financial standing.

Understanding Government Travel Cards

A government travel card is a financial instrument provided to federal employees, including military and civilian personnel, for use during official government travel. Its primary purpose is to cover authorized expenses such as airfare, lodging, rental cars, and meals incurred while performing official duties. These cards are typically issued by commercial banks, like Citibank or Bank of America, under contract with the General Services Administration (GSA) SmartPay program. The card functions as a charge card, meaning the full balance is generally expected to be paid by the statement due date, unlike personal credit cards. Using the card for personal expenses is strictly prohibited and can lead to disciplinary actions.

Reporting to Credit Bureaus

The question of whether a government travel card appears on personal credit reports is nuanced. Generally, routine usage and timely payments are not reported to the major consumer credit bureaus. This means positive payment history typically does not contribute to building an individual’s credit score.

However, the account is tied to an individual’s Social Security Number, and negative information can be reported. If an account becomes severely delinquent, this negative information can be reported to credit bureaus. For instance, some programs specify that an outstanding bill will be reported if it remains unpaid for 210 days. The initial application process usually involves a “soft pull” credit check, which assesses creditworthiness without affecting the applicant’s credit score.

Payment Responsibility and Credit Impact

Despite being for official government expenses, the employee is personally responsible for paying the government travel card issuer directly and on time. The government’s reimbursement process for travel expenses is distinct from the employee’s direct payment obligation to the card vendor. Employees are typically required to submit travel vouchers within five days after completing their travel to initiate the reimbursement process.

Failure to make timely payments to the card issuer can lead to serious negative impacts on personal credit. Consequences include late fees, suspension or cancellation of the travel card, and potential reporting of delinquency to credit bureaus. For example, an account may be suspended if payment is not received within 61 days, and cancelled if unpaid for 126 days. Furthermore, if a balance remains significantly past due, the government may initiate salary offset, deducting the owed amount directly from the employee’s disposable pay, with a maximum deduction typically around 15%.