Inactive cardholders can hinder your game plan.

Got idle cardholders? There is a risk to having unused cards laying around who knows where. In addition, if your rebate incentives are impacted by average net spend per card, inactive and under-utilized cards will drag your program down. Reviewing and addressing inactive cardholders at least annually is a best practice that contributes to optimal program health. However, there are also things you can build into your program design to ward off issues in advance. Following are suggestions for both pieces.

Program Design Elements   

Determine your stance on “backup” cardholders. Does each department really need one or more cardholders on standby? If a backup is called upon to use their card, they will actually remember the card program policies and procedures? Instead of having backups throughout your organization, could a designated department like purchasing or AP fulfill a backup role?

Define within your policies and procedures what “inactive” means; for example, a P-Card without transactions for nine consecutive months or fewer than three transactions during the fiscal year.

Add a stipulation to your internal agreement that your organization reserves the right to close inactive cards.

Ensure the card program manager/administrator (PM/PA) receives notifications from HR about employee status changes that could warrant closing their card account. This will assist your proactive efforts in managing cardholders.

Document the process the PM/PA should follow as part of the annual review (see next section for suggestions). For the sake of consistency, you could even prepare a template to use when contacting inactive cardholders. Also decide if a department manager can overrule any recommendations to close an inactive account.

 Take steps to help make all cardholders active. (Photo by  Mpho Mojapelo  on  Unsplash )

Take steps to help make all cardholders active. (Photo by Mpho Mojapelo on Unsplash)

The Annual Review

Do not automatically close inactive accounts. First figure out what is going on and then take appropriate action; following is a suggested process. 

  1. Generate a report, by department or by manager, of cardholder activity.
  2. Identify the cardholders who meet your criteria for “inactive.”
  3. Review the department overall to see if their card performance meets predefined goals or expectations.
  4. Contact the cardholder and/or manager to further research why the cardholder is inactive. Does their role involve making purchases or paying bills?
  5. Make a determination about how to address the inactive cardholder(s). If their department is performing well as a result of other cardholders, then the inactive card account might not be needed. If the department is under-performing from a card perspective, then take a more holistic approach. Do their cards need higher limits to accommodate their purchasing needs? Would additional training be of benefit?
  6. Retain documentation related to the decision.

See 15 other annual tasks for card program fitness


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

Subscribe to the Blog

Receive notice of new blog posts.