Posted on Jan 19, 2021
Does DFAS or some level of DOD make interest payments to Citi bank on GTCCs?
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So Citi bank issues GTCC's to soldiers, who charge travel expenses to them, and the vouchers are submitted through DTS and the account gets paid off. But sometimes the cards carry a balance on them, and the soldier incurs no fee as long as the minimum payment is made. The soldier also doesn't pay any interest on the balance. Sure there is the occasional late fee, but that cant possibly produce enough revenue to justify the administrative cost that Citi incurs by running the program, let alone tying up all of that capital. If no one is paying interest on it than the government is just borrowing money for free, and even the treasury cant do that... So I guess my questions are:
1. Does some level of DoD or Government make interest payments to Citi on the total balance of all accounts and if so who?
2. If not, What is in it for Citi Bank? Is it 100% merchant fees and Late fees?
1. Does some level of DoD or Government make interest payments to Citi on the total balance of all accounts and if so who?
2. If not, What is in it for Citi Bank? Is it 100% merchant fees and Late fees?
Finance
Defense Travel System (DTS)
Posted 4 y ago
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Citi makes 3% (I believe it is still 3) on cash withdrawals- no longer reimbursable to the member. Businesses are also charged a normal 3% fee for accepting the card. There should never be a balance- or your command should step in and the member is charged interest. Not paying the entire balance after the TDY is required by the JFTR and the card statement you are required to sign to get one. I am curious to what leads you to believe that the service member is not charged for this?
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Like most contracts, the Government pays for the administration of the credit card program. My guess would be that it is a fixed price contract. The only late fees the Government would liable for would be if they did not make those payments in a timely fashion. I am not sure about the individual travel cards but the impac cards used by organizations actually rebate a portion of the merchant fees to the Government similar to the cash back a person might receive from their credit card.
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Maj Marty Hogan
MSG Gary Eckert the card is under a members SSN and late charges are all on the individual. There are charges offs- the company eats them like a regular account charge off. I am trying to remember when we went to Citi if the government entered a contract or Citi voluntarily came forward. We got rid of Diner's Club, AMEX, and another I can't recall cause they wanted to charge. I have been in long enough to remember going to the cash window and getting an advance and returning to file the settlement voucher in five carbon copy editions that you could never read.
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The government is not borrowing funds. The government is essentially saying take that TDY we have the funds and will pay when the travel voucher is settled.
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