When I was still a student I, like I imagine many students, was a "rate tart". What that meant was that I would jump ship between credit cards and transfer balances to get the freebie 0% interest rate and rack a bit more debt for my hedonistic pleasures.I fear that someone in the Welsh Office may now be doing the same thing. Apparently in 2004-05 the spend on the corporate credit card in the office was just £1,213.41, The following year it was £4,371.46. Then something odd happened in 2006-07 - in a department of just 60 staff it leaped to £13,950.40.
Balance transfer anyone? According to the Welsh Office the steep rise "is the result of an active programme within the Wales Office to encourage their use." (a policy success?!) Apparently this has actually "saved" money on processing and transaction costs and so "the increase reflects greater usage of cards, rather than increased overall spend."
I'm impressed I must admit. I never thought I'd see the day where daily compound interest of an average of at least 10% pitched as a way of saving money. I reckon they're all just getting they're own back for the poor bonuses.
2 comments:
Dizzy,
I think this is a pan-government initiative - the MOD has pretty much gone that way too. Saves on admin costs for expenses processing and payments and much else (and it acts as a bit of a disincentive to minor expenses fiddling - harder to hide it on a card statement than one of many receipts stapled to the back of a hand-written form.)
I am pretty sure the cards are cleared off at the end of each month, so no interest to pay - although I assume your 10% daily compound was an attempt to describe the rise in use rather than an actual comment about interest?
S-E
Yes, standard "corporate" credit card is actually run like a charge card.
As long as someone is carefully checking the statements, and reviewing reasons for expenditure, it is a great way for staff to pay for minor expenses. Petty cash handling really does reduce productivity in the accounts office, and there's always the temptation for an employee to lose a receipt for expenditure that's not kosher (or necer happened).
But ...
As long as someone is carefully checking the statements...
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