Money Talk: Corporate Credit Card Spending Up And Rising

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CORPORATE CREDIT CARD SPENDING UP AND RISING
New data from the “2014 Purchasing Card Benchmark Survey Results” indicates that corporate credit card spending is up nearly 25%, but that’s not a bad thing.

The report shows that purchasing card spending rose from $196 billion to $245 billion between 2011 and 2013, and spending is forecast to rise at a rate of about 10% through 2018.

The report also predicted that the use of electronic payments is expected to rise from 18% in 2013 to 43% of corporate credit card holders in 2016.

So what’s at work? The report indicates that corporate credit cards offer better internal controls and reporting on company expenses and can reduce fraud from employees or vendors who rely on reimbursements.

“Using purchasing cards has been very beneficial to many of our business customers,” said Jim Cargill, sales manager of Arvest Bank Central Arkansas. “Some business owners or administrators may be wary of letting employees use company credit cards but, used wisely, they offer many advantages. The types of controls and reporting available to small businesses today were not possible just a few years ago except to large companies.”

FED MINUTES DESCRIBE PATIENCE
Vanguard offers analysis on the Federal Open Market Committee minutes, which were released last week. In short, the Feds remain patient in monitoring economic conditions in anticipation of raising interest rates.

The minutes noted that the U.S. economy continues its steady expansion, inflation remains low, and the global economy remains a concern.

Minutes from the January 27–28 FOMC meeting suggest that while the Fed won’t rush to make a decision, discussion between committee members on when to raise short-term interest rates is heating up.

According to the minutes, the Fed will wait to take action until committee members are satisfied with overall economic conditions and, more specifically, progress made toward the committee’s objectives of maximum employment and 2% inflation. However, the committee discussed possible strategies for moving rates higher, including the timing and pace of rate increases, as well as a communications plan.

“Despite relatively weak economic news this week, the economy continues to improve as the labor market tightens,” said Vanguard economic analyst Zoe Odenwalder. “The Fed reiterated that sentiment in this week’s FOMC meeting minutes as the committee members discussed the potential for raising rates, which we believe should be looked at as a positive sign of the strength and resilience of the U.S. economy.”

SBA ‘SEED FUND’ ROAD TOUR FOR ENTREPRENEURS, TECH FIRMS COMING
The U.S. Small Business Administration (SBA) will launch an 18-state road tour in late March that is part of the agency’s national “seed fund” outreach initiative to help many advanced technology firms move from idea generation to commercialization.

The national road tour, called “Seeding America’s Future Innovations,” is administered through the SBA’s Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs. Read more here.