Dipping my toes in the business cards pool

[MrDisco99]

After all the research I've done, I'm considering going after some Amex business credit cards.  I don't have a legally registered business, but it sounds like there's really nothing really keeping me from being eligible for business credit cards anyway if I apply as a sole proprietor with my SSN.  I do sell stuff on eBay which I guess counts as a business.  It's a very small source of income, though.

The one thing that is giving me pause about submitting the application is the box asking for annual business revenue.  It tells me it has to be at least 4 digits.  I make a little bit of money from eBay selling but I don't think I've ever added it up to that much before.

I do make 6 figures from my 9-5 job and I've got a good history with Amex personal cards.  If I put my salary in the household income box and put $1000 for business revenue, am I still likely to get approved?  In other words, would the salaray that gets me approved for personal cards be enough to approve me for a business card?  Or does my actual business income have more of a role to play in the approval process?

Another question is am I opening myself up to any scrutiny from Amex (or the IRS) if I use a business card for obviously personal expenses?  Would the mere possession of a business card cause the IRS to expect me to report business income on my taxes?  Just trying to get an idea of what risk there is in applying for a business card in my situation.

Thanks!

[Credit-hoarder]

I've been an eBay seller for the last 15 years and I list it as my business (I  do also have a FB page) but the income from it probably isnt more than $20k-$25k per year. With that said I've been told if you make less than those 2 amounts reselling stuff--the IRS isn't really interested. In the 3 years I've had a business card they've never come knocking on my door.

[Gmood1]

I input $1000 a year as business income in my Amex business apps. They still gave me roughly $30k in business CLs based on that. lol
The most recent Amex Amazon CC had a SL of $11,200.

[Anonymous]

Hey MrDisco99,

To answer your first question, it's kind of tied up in your second question. Your approval is based on your personal ability to pay because all AMEX small business cards are PG, "personal guarantee". 

Your second question, regarding the IRS, well, they couldn't care less about the business vs personal card. I have stated before and I'll state it again, the only difference between a personal and a small business card (from Amex) is the T&C of the card. You are personally guaranteeing the liability of charges when you put your SSN into the app. Lastly, the IRS doesn't care about the method of payment. What the IRS cares about is how you account for and pay taxes against income and/or revenue (and that you can prove it). 

In your case as an Ebay seller, if you are buying and selling you need to focus on properly booking sales and expenses and paying taxes accordingly on profits.

The folks you need to think about are Amex.

There is a line in the cardholder agreement that states:

"Each cardmember acknowledges and agrees that cards are intended to be used for the Company's commercial or business purposes." 

If you apply for a [small] business card, yet it you transition your everyday, personal spending habits to that business card, they could throw up an eyebrow. I've not heard of any adverse actions, but I guess it could definitely happen. Additionally, if that did happen, and Amex raised an eyenrow, say in a FR, they may ask for access to your returns and could question the lack of a schedule C.. I don't know for sure, I've never heard of it happening but it could. 

Lastly, to circle back and walk back some of my fear-mongering :-) - $1000 of business revenue is fine for an application. Amex isn't worried about your $1000 in revenue, but they are concerned about your ability to pay. If you have $1000 in revenue but spend $10k to make it, well, they want part of the expense in swipes such as shipping expenses, office supplies, ebay fees, etc, they win. 

Just make sure it's legitimate and you can prove your business activity. While I am sure there are folks that will read this that use business cards for personal spend every day, I don't. My accountant always says "keep your affairs in tiny little transparent boxes". 

I would caution, as I said before, about applying for a business card, and then all of a sudden your gas and groceries start hitting your Blue Business and not your Everyday....  

[Gmood1]

Chase may care about what you use their business cards for. Amex could give two flips about it. As long as it's not MS. And the bill is paid monthly, they don't care.
My Amex cards get used for every thing under sun. I've never had an issue with what card was used for what purchase.
As long as they can withdraw that statement balance from your bank account. Amex is a happy camper.

[Anonymous]

Thanks Gmood1, 

Forgot to mention manufactured spend. A big no-no. With pretty much all issuers. But especially Amex. 

I think Gmood1 is correct about Amex and they couldn't give a flip, but my previous post is in line with T&C's and the IRS. 

Both of which I have personal experiences with. 

Amex wants you to pay the bill, and the IRS wants you to pay the taxes you owe...

[SouthJamaica]

---

@MrDisco99 wrote:

After all the research I've done, I'm considering going after some Amex business credit cards.  I don't have a legally registered business, but it sounds like there's really nothing really keeping me from being eligible for business credit cards anyway if I apply as a sole proprietor with my SSN.  I do sell stuff on eBay which I guess counts as a business.  It's a very small source of income, though.

The one thing that is giving me pause about submitting the application is the box asking for annual business revenue.  It tells me it has to be at least 4 digits.  I make a little bit of money from eBay selling but I don't think I've ever added it up to that much before.

I do make 6 figures from my 9-5 job and I've got a good history with Amex personal cards.  If I put my salary in the household income box and put $1000 for business revenue, am I still likely to get approved?  In other words, would the salaray that gets me approved for personal cards be enough to approve me for a business card?  Or does my actual business income have more of a role to play in the approval process?

Another question is am I opening myself up to any scrutiny from Amex (or the IRS) if I use a business card for obviously personal expenses?  Would the mere possession of a business card cause the IRS to expect me to report business income on my taxes?  Just trying to get an idea of what risk there is in applying for a business card in my situation.

Thanks!

---

You should just put in what is true. If you're selling on eBay, then that is a business, but if you don't have $1k a year in income, then you don't.

[toadsworth]

Recently got my first business card, the Amex Amazon Business Prime. $1000/year revenue. $10,000 SP approval. Sole proprietorship, selling on ebay occasionally.