Declining Balance Cards do not receive the same press as other Commercial Cards, but they can be a powerful part of your card program. Missouri State University is embarking on this path now—piloting a type of Declining Balance Card commonly known as a Single Event Travel (SET) Card—to get away from travel cash advances. Following is my interview with Isaac Balasundaram, Procurement Card Coordinator for the university. Learn about their SET Card plans, including some early successes and challenges.

The Driver

Q: You noted that a driver for piloting SET Cards is a desire to move away from cash advances. Can you elaborate?

A: The cash advances, especially ones for our Study Away groups, often equate to large sums of cash that are deposited into an individual’s personal bank account or carried by someone as they travel. The SET Card provides so much more security and control. Today, if they run out of cash on their trip, they have to take money out of their personal account to be reimbursed after the trip is complete. Our initial focus for SET Cards is our Study Away groups, but I would eventually like to use them as a substitute for all cash advances issued by the university.

Program Management

Q: Who will manage the SET Card program—the same team/person who manages the other cards?

A: Yes, as the Procurement Card Coordinator, I am managing the program and we have developed a SET Card policy and process.

Application Process

Q: Please describe your application process.

A: The application form, designed specifically for SET Cards, includes fields for key information, such as travel dates, location, and purpose; estimated expenses for the trip; and the corresponding card limits needed. It also includes the terms and conditions for SET Card use, which align with our travel policy, and spaces for the appropriate signatures. As part of the policy, we are mandating training for any SET cardholder prior to card issuance.

Cardholder Accountability

Q: After a trip, will cardholders need to complete an expense report?

A: Yes, we developed a new expense report form. Cardholders will complete and submit it once the trip is complete, along with their receipts. Their department will also submit a cardholder statement obtained from the bank system, so we have a match to the expense report to make sure there is nothing on the card that the cardholder did not report.

Per policy, any unauthorized charges on the SET Card will be added to the individual’s accounts receivable after the trip is complete.

Single Event Travel (SET) Cards can be a way to reduce cash advances and the issues that go along with managing cash.

The Pilot Phase

Q: What does your current pilot phase entail?

A: The cards are issued by the bank in batches of 25. There is a two-week processing period, so I have already requested and received the first batch of cards. The first “pilot trip” is to Costa Rica in January. That will really tell us if this program will work for these types of situations.

With the Study Away groups, they have to prepay many expenses, so, even though the actual trip may be in March/April, they will be issued the card now—in December. The card for the Costa Rica trip was issued a couple weeks ago, so the cardholder can start pre-paying for his expenses.

Q: What are some challenges and successes you have experienced at this early stage?

A: So far, things have worked out as expected. I’ve received a very positive response from individuals who we are trying to recruit for the pilot phase of this program. The SET Card has an ATM withdrawal feature, which really benefits the cardholders who will need to have access to some cash on their trips. In some of the cases with individuals traveling to certain third-world countries, they will need to use cash for a majority of their transactions. This card gives them the security to be able to take their card to their foreign location and withdraw money from an ATM there. The downside is the fees associated with withdrawing money from an ATM that doesn’t belong to our card issuer. Whenever possible, we are recommending withdrawing cash locally prior to the trip. Also, one challenge is that I have to notify the bank prior to every foreign transaction to make the necessary changes to the card. This adds a few more steps.

A question that was brought up was vendor acceptance of a card that doesn’t have the cardholder’s name on it. To address this, I will be issuing an authorization letter on our university letterhead to the cardholder when they pick up their card, tying in the card number to the individual on the trip. We are also directing cardholders to take their university ID and their driver’s license on their trip.

Learn More

Recharged Education will continue to see how the program at Missouri State University is going. Meanwhile, visit the webpage on Declining Balance Cards to gain insight from a couple other end-users.

About the Author

Blog post author Lynn Larson, CPCP, is the founder of Recharged Education. With more than 15 years of Commercial Card experience, her mission is to make industry education readily accessible to all. Learn more…

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No magic wand needed. Declining Balance Cards are readily available and can help resolve different pain points, such as managing expenses for infrequent travelers, capital projects, and meetings/events. Two end-users shared their experiences with me, highlighting the value of these cards.

Successful Uses

Infrequent Travelers

Many organizations, in their travel expense management efforts, face the dilemma of how to address employees who travel for business only occasionally (e.g., less than twice per year). For Intermountain Healthcare, the best answer is Declining Balance Cards, which they call a Single Event Travel (SET) Card. Margie Strong, Senior Card Program Coordinator, summarizes the benefits of their program, “Prior to implementing SET cards, infrequent travelers submitted reimbursements, creating not only a large loss in rebate to our card program, but a significant loss in recapturing state sales tax due to our tax exemption status.”

The program management team maintains a block of inactive cards, so they can readily be set up and issued. This includes establishing an appropriate card limit, travel-related Merchant Category Codes (MCCs) and expiration date. When loading the limit, one lesson they learned early on was to add some padding to the employee’s estimated travel expenses to help prevent transaction declines during the travel period.

In Review: What They Are

A Declining Balance Card (sometimes called a Controlled Value Card) is related to a P-Card, but spend limits do not refresh each month; rather, a spend limit and/or expiration date are established up front, giving it a specific “shelf life” to accommodate a special project, purpose or budget. As such, the card might be called a Meeting Card, Project Card or similar.

Consider how Declining Balance Cards could add a little magic within your organization to solve an ongoing problem.

Communication is critical to their success. They post information about the SET Card program online, offer a fact sheet, promote within internal newsletters, talk with stakeholders, etc. Overall, the program provides an efficient and controlled solution to what was an ongoing problem in the past. For more details about the Intermountain SET Card program, including how they combat occasional acceptance issues due to no individual name on card, please visit the related webpage.

Capital Projects/Federal Grants

Declining Balance Cards can equally succeed in the public sector. JoAleen Ainslie, CPCP, is an advocate, recalling her previous job experience with a public school district. The cards worked well for multiple federal grants and a capital project related to the building of a new elementary school. She shares, “To me, Declining Balance Cards are a wonderful financial payment vehicle with built-in control mechanisms. The cards prevented anyone from going over budget and created all kinds of pertinent reporting data to track required documentation for retrieval prior to the grant expiration dates/clean up periods. Because of the ability to assign dedicated accounting elements, I could generate reports on demand, without waiting for a cost accounting reconciliation. We also utilized MCC controls to prevent the cards from being used for items not allowed in grant parameters.”

Given the various possibilities, Declining Balance Cards can enhance your payment toolkit. Have you explored how they could help your organization?