The federal government has deactivated over 600,000 credit cards issued by the government, marking one of the largest payment system overhauls in recent history. The move, initiated by the Department of Government Efficiency (DOGE), is part of a broader effort to reduce inefficiency, cut overspending, and streamline federal operations.
According to DOGE, over 55 federal agencies have been affected by this move. “Credit Card Update! After 14 weeks, the program to audit unused/unneeded credit cards has expanded to 55 agencies resulting in ~610k de-activated cards. As a reminder, at the start of the audit, there were ~4.6M active cards/accounts; more work to do!” DOGE wrote on X (formerly Twitter).
Why Over 600,000 Government Cards Were Cut and What It Means for Federal Spending
Federal agencies use credit cards to perform day-to-day operations, such as handling emergency situations and purchasing office supplies. It is estimated that these cards are used to transact about $30 billion in annual government transactions.
According to Michael Ryan, founder of MichaelRyanMoney.com, these cards are essential to running government operations. “These aren’t your typical consumer credit cards. We’re looking at lifelines for federal agencies—cards that keep the lights on, quite literally. Need to book a last-minute flight for a critical meeting? There’s a card for that. Emergency maintenance part for a military vehicle? Yep, another card. Office supplies for a research lab working on something that could change the world? You guessed it—another card.” He said in an interview with Newsweek.
Jessica Childress, a former attorney with the Department of Justice, emphasized the importance of these credit cards. She said, “These cards are the ways that many government workers are performing the duties they’ve taken an oath to perform. It facilitates the ability of these employees to do their jobs.”
In his second administration, President Trump issued an executive order to freeze almost all agency employee credit cards. He only exempted credit cards used for disaster relief or natural disaster response benefits or operations or other critical services. These credit cuts are in accordance with DOGE’s broader cost-saving mission.
Critical Services Affected as Agencies Adjust to Credit Card Cuts
While the goal is to cut wasteful and unnecessary spending, some agencies have raised concerns about operational hurdles. For example, in April, the Transportation Security Administration (TSA) reported having challenges in supporting bomb-sniffing dog units due to the credit cards freeze.
There is an ongoing debate about whether freezing credit cards actually saves the government money. In most cases, workers spend their money and are refunded using the same funds but now following administrative steps. This introduces potential delays and financial hurdles.
According to experts, freezing credit cards may not reduce costs as much because still supplies need to be purchased, and flights need to be booked among other operations that enable agencies to operate. Instead of saving money, the move to freeze credit cards is causing more paperwork and causing delays in processing times.
What to Expect as the Credit Card Audit Expands
Although Elon Musk resigned from his role as the head of DOGE in late May, his aggressive cost-cutting measures are still be rolled out. The approach by DOGE has been described as a “chainsaw approach,” where measures are rolled out one after another, and there are no signs of slowing.
DOGE has confirmed that the credit card audit is still ongoing, and still, more work needs to be done to achieve ultimate efficiency. No information has been released about the number of audits or deactivations that may occur. However, insiders suggest that the program might continue to expand in the coming months.
The rapid deactivation of over 600,000 credit cards in only 14 weeks is an indicator of DOGE’s commitment to a sustained push towards fiscal reform and accountability in government spending.