AMEX...no spending limit, but you can't spend anymore...

[shane82388]

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@LS2982 wrote:

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@jsickz32 wrote:
Wouldnt recommend using personal amex card for business expenses

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Totally agree, your setting yourself up for an FR.

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When you say "use for business expenses" do you mean buying meals and some stuff from Staples or do you mean ordering a houses worth of lumber, nails, etc for a contractor?

[enharu]

To clarify, it really depends on your reported income as to whether its a good or bad idea to put business expenses onto personal cards.

Many non-independent consultants, i.e. those employed by Accenture, McKinsey, etc, often put business expenses (mostly flights and hotels) on personal cards and they get away with it without any problems. I did that for my chase and Wells Fargo cards back in the day too and was fine.

However, if your reported income is just 100k for example, and you are putting 50-100k worth of charges on it each month, chances are you are going to have a problem, because your income and expenses simply don't match up. Any lender would be curious, confused and even wary of what you are doing, because the client is essentially also mitigating part of risks associated with business operations onto his personal unsecured debt. Personal cards are meant to be used for personal expenses. They are not intended to provide liquidity for your business.

[Anonymous]

We've used our personal Amex for large business charges mainly because we have nearly an unlimited limit (>$100k).  However, if you are going for a mortgage and a balance shows on the amex which includes charges that high...its a freaking NIGHTMARE to get it resolved with the UW.  They'll want you to shut down the card immediately without extensive proof that this is an anomaly. 

[Repo-ed]

my limit was approved for 35k on my PRG and I have no idea how they could come to that.

No way I could ever afford that type of expenditure.

[Anonymous]

Hmm, had no idea that running business expenses through the card would be a problem. I actually talked to a lady at AMEX and asked if it's possible to get a second card so that I could use one for business and one for personal, to help keep things more organized, and she had to ask then came back and said it wouldn't be a problem...but they'd have to charge a yearly fee and also run it through as if I was adding an AU (which meant potential HP on my credit) so I decided against it, but again it didn't seem like a problem to run business charges on the personal card. Then again the charges won't be very high, probably $1500 - $3000 per month for business use.

Are the chances good that if I apply for a business card with them I would get approved since I was able to get the personal card? They do send out targeted offers for my business every now and then but I've always thrown them away thinkng there was no chance I'd get approved.

[Open123]

While it's a violation of the T&C to charge business expenses on a personal card and vice versa, it's enforced at Amex's discretion.  If they're looking for a reason for account closure, they can use this as one of the reasons.  If everything else is in order, they couldn't care less.

Regarding the 13 month rule, Amex can and has circumvented it.  They upgraded my BCE to the BCP on the 9th month, but didn't start charging me a fee until about 3 months later; and, even then, for the pro-rated amount for the remaining 8 months.   -  sorry, this was meant for another thread.  With all the Amex threads, I'm getting the topic mixed up.

[enharu]

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@Anonymous wrote:

Hmm, had no idea that running business expenses through the card would be a problem. I actually talked to a lady at AMEX and asked if it's possible to get a second card so that I could use one for business and one for personal, to help keep things more organized, and she had to ask then came back and said it wouldn't be a problem...but they'd have to charge a yearly fee and also run it through as if I was adding an AU (which meant potential HP on my credit) so I decided against it, but again it didn't seem like a problem to run business charges on the personal card. Then again the charges won't be very high, probably $1500 - $3000 per month for business use.

Are the chances good that if I apply for a business card with them I would get approved since I was able to get the personal card? They do send out targeted offers for my business every now and then but I've always thrown them away thinkng there was no chance I'd get approved.

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It can be a problem.

If your spending is way higher than your income, chances are you will get flagged for FR. If you are using most of your CL (or allocated limits) on business expenses, it can be a problem too. Amex like spending. Every single credit card issuer likes spending. However, Amex is also known for being more risk adverse than other lenders, such as CapitalOne. If business expenses account for only a limited percentage of your CL, or if the expense amount doesnt grossly exceed your income, chances are you should be fine. Your income and assets also play a big role with regards to this. Do remember however that this is a "courtesy" leeway Amex is extending to you, and that there's always a chance that they might take action in the future. The reason why they are doing this is not because they don't like you to use their card, or because they have zero faith in your business, but rather because of different risk exposures.

Since you're already preapproved, chances are you should be approved for the business credit. I am not too sure what the underwriting requirements and procedures are however. If you already have established your business credit, you should have nothing to worry about at all.

[scenery_guy]

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@Anonymous wrote:

Hmm, had no idea that running business expenses through the card would be a problem. I actually talked to a lady at AMEX and asked if it's possible to get a second card so that I could use one for business and one for personal, to help keep things more organized, and she had to ask then came back and said it wouldn't be a problem...but they'd have to charge a yearly fee and also run it through as if I was adding an AU (which meant potential HP on my credit) so I decided against it, but again it didn't seem like a problem to run business charges on the personal card. Then again the charges won't be very high, probably $1500 - $3000 per month for business use.

Are the chances good that if I apply for a business card with them I would get approved since I was able to get the personal card? They do send out targeted offers for my business every now and then but I've always thrown them away thinkng there was no chance I'd get approved.

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So they offer you a second card on the same account to help you track your business spending on a personal card? That's what I am saying, it's fine.

Search Merchant Category Codes and you might get some insight as to what I am pointing out here. All merchants are assigned a MCC by a bank when they begin to accept Visa and MC (something similar is done by AmEx). It's a pretty complex form of tracking spending all tied to a number that represents the seller's industry. It's also used by the IRS and can be used to track your spending and who a company needs to send a 1099-MISC form to end of the year. I'm being very broad here as the details are very boring (to me, not my accountant) but the point is when you swipe your card that transaction is coded as to the MCC of the seller with no regard as to the name of the company. 

I'm a 7829 - that's my IRS and bank assigned code. If you gave me your card to swipe that would be the MCC associated with the charge even if I called my business Sofa King. Neither one of us can hide the fact as to what industry I work in for a reason. So we can't hide the type or goods or service purchase we made and every bank that issues a credit card can clearly see what type of purchase it was - including AmEx. They know everything. 

Sure, at some point AmEx might flag you for FR (Financial Review) if your personal card spending goes over your annual income level but let's be honest here - the reason for that FR was spending more than earning and would more than likely be considered potential money laundering than an abuse of business purchases on a personal card. I'm not disputing the T&C for AmEx cards, I'm just relating my personal experiences in the past 13 months as a card holder. I have spent well over 4X my provided personal income level. Yes, I also have a business and they were provided the gross revenue so I can only assume they have combined my personal income and my business sales and come up with a figure that is my ceiling on combined business and personal card purchases. I'm not there yet. 

And again someone please explain Joe Salesman for The Widget company who is on the road for 22 days a month charging business expenses on his personal card. Rental cars, hotel rooms, flights, meals, miscellaneous services and more. I know for a fact that all adds up to more than what he earns each year. Not every business provides every Joe salesman a company card or a corporate card. They simply reimburse Joe monthly or sooner all of his expenses so he can pay the bill. A good friend of mine does this at his job and earns several flights to Europe with hotel stays off the points he earns for company spending. 

Mike_B03 if in doubt call the number on the back of your card and ask some questions. Ask to be transferred to a supervisor and ask them again if you like. Do what you feel is right and if that means you apply for a business AmEx to keep them separate so be it - get the point bonus, use the card and move on. Plenty of ways to avoid AF for cards as long as you don't mind opening and closing cards and taking the HP hits. PM me or post in the business credit area for more business based help. Lots of ideas in there about good business cards and offers. See you there? 

I'm going to leave this thread alone now, you guys and gals do what you do.

[enharu]

scenery_guy, do you have any Amex business accounts? I'm asking only because I'm curious as to what the "limits" exactly are with Amex before they initiate a FR.

If you already have an Amex business account set up, that could have been a reason.

I used to work as a consultant for a consulting company. I was on the road a lot and most of my expenses were on my personal cards. My reasoning and guess is that when filling up the credit app, I had declared my job position, industry and the firm I am working at. Whenever I am flagged for any review because my spending exceeded my income, an underwriter could see the profession I am in, and understand the reasoning behind those charges.