@EricTheCEO wrote:First, I think some commentators have it wrong. The issue with making a purchase at a business with which you have a control relationship is all about credit risk. Its a cash advance in disguise and makes it also look like you are capable of spending, then repaying more money.
AMEX generally allows on an NPSL card 2x to 3x your average monthly spend as a general rule of thumb, which a certain minimum credit limit based on your creditworthiness. So, if you only spend $1,500 a month on the card but you have an 820 FICO and good income, you may have a $25,000 limit. NPSL
cards have an actual limit, more on that in a moment. If you are spending $20K a month on the card, you can make a $50K purchase no problem (again, 2x to 3x monthly spend generally).
IF you run a charge for $50K to a business you own every month, absent AMEX flagging and shutting down your account, the large bogus charge will create an exaggerated NPSL "limit" for your account of $150K. But you don't really have the income and assets to support that credit line, it's surreptitiously based on a bogus charge to your own company. THAT is why AMEX is super sensitive to spend at any business to which you are affiliated. Large bogus charges present credit risk by breaking their NPSL model of 2x to 3x spend. So how does AMEX respond? They credit rate your account and give you a hard cap like the did to the OP.
Suppose the OP put $25,000 on his AMEX via his own business. Funds deposit into his back account (less merchant fee), he pays off the credit card. This single charge would, in theory, "bump" his NPSL credit line calculation by at least $16,000. They also don't know the "why" (because it really makes ZERO sense to make a charge to yourself and pay merchant fees), so the credit algorithms say "he could be having trouble and is in need of cash." So AMEX responds with a hard cap, and considers the possibility you ran the charge and paid the merchant fee because you are desperate for cash, and severely hamstrings your account.
The points are (generally) not the concern, except where there are some bonuses coming from what is known as manufactured spend.
Alright - now I am a BIG spender with AMEX. So let me share with the world some insider information:
1. when I started with AMEX in 2019, I had a limit on my Delta Platinum card. I requested a CLI, denied. I asked for review and escalations teams and all that stuff and was given the "there is nothing we can do this is all automated" speech. I was putting, at the time, what I believed to be significant spend on the card and couldn't get AMEX to budge.
2. I eventually added a NPSL platinum. Started to put some spend on it. Reps would give me the standard song and company script about NPSL and rule of thumb 2x to 3x. This is, generally, actually true. But it's not the whole truth.
3. Next, for my side business, I want to buy a car to rent on TURO. I check the Amex "Will my charge be approved" tool, see I can do $49,999, and I go and buy an explorer with the card. I had to agree to pay the dealer the merchant fee. Some dealers I talked to were firm that they wouldn't take more than $3K or $5K or whatever on credit card. Finally I found a dealer that wanted to make a deal.
4. Repeat the car purchase a couple times over the next 30-60 days as I put more cars in my TURO fleet.
5. Next, I want to pay the IRS $200,000 using my AMEX. The "will my charge be approved" tool only goes to $99,999. So I call AMEX. Magically, a credit team will suddenly discuss my account. The team that I was always told did not exist and had no humans. The guy is super nice and tells me, to the penny, what my "NPSL" is. He says something like "Your account is credit-rated to $120,313 so a $200,000 charge will not be approved. What you can do is wire us the money ahead of time." He then sends me wiring instructions for American Express (with Chase Bank!) to send the funds so I can make the change.
6. I decide I am going to start paying "major" vendors to my company with my AMEX platinum card. One vendor we use provides us with 60 offshore resources and costs $120,000 a month. AMEX approves these charges no issue.7. I complain that I don't have a black card. Magically, this team that everyone at AMEX says doesn't exist..... they suddenly start chatting with me. My black card is denied for the time being, because "spend is only one element" of their criteria. But they are super nice people.
8. I get a call from American Express asking if I am going to continue to spend at my current level, and "warning" me of sorts that a financial review would be forthcoming. I compliant that I don't have a black card..... because, why not, the Centurion card is cool.
9. I pay marketing data vendors like ZoomInfo $50K, our outside attorneys ($50K) and more payments to the IRS for myself and my partners ($500K) using the card. It's all approved no issue.
10. AMEX pretty much freezes the account. It goes to financial review team. On the app it says my card is suspended, but the card continues to work just fine. So I guess it wasn't really frozen.
11. AMEX underwriting asks for taxes, bank statements, and a bunch of other documentation to substantiate the funds are legal, that I am paying taxes (hey! Most of the spend was to the IRS!!!!!) and that I have the appropriate means to spend. AMEX ensures they fully know who I am, the reasons for the spend, and do AML/KYC/BSA type review. I share also corporate
financial information and tax returns and execute some documents since some of my charges relate to my company (although we have the "corporate cards" too). I agree with AMEX underwriting to remove the NPSL and go with a $250,000 hard limit. I really don't go over that without paying it down. I wouldn't want a $1M bill.
12. I had several other random conversations with their credit team throughout.
13. Still no black card. Continue to complain to AMEX about that via near weekly emails to their Head of Platinum and Centurion products.
14. What I can tell you is that when you start to have serious spend: (a) AMEX wants to know all about you and that you and source of funds are legitimate, credit worthy, tax paying; and (b) many departments (credit, underwriting, finance, etc) that did not exist or never took direct calls before suddenly exist and take direct calls. These higher departments also can tell you on an NPSL card what you are credit rated for. They also have special tools, like underwriting wanted to ensure my account was good to go, and they were able to do a test charge in their system.
Fascinating.
@EricTheCEO wrote:First, I think some commentators have it wrong. The issue with making a purchase at a business with which you have a control relationship is all about credit risk. Its a cash advance in disguise and makes it also look like you are capable of spending, then repaying more money.
It's a violation of both the cardholder agreement and your merchant services agreement; the latter can be construed as a form of money laundering. While it may also pose a credit risk, it's more about the agreements and federal law.
@EricTheCEO wrote:AMEX generally allows on an NPSL card 2x to 3x your average monthly spend as a general rule of thumb, which a certain minimum credit limit based on your creditworthiness. So, if you only spend $1,500 a month on the card but you have an 820 FICO and good income, you may have a $25,000 limit.
AENB's understanding of your financial ability to repay is weighted far more heavily than credit scores or spending history. No issues ever on both business and personal sides spending many multiples of the previous 12 months combined from time to time.
@EricTheCEO wrote:5. Next, I want to pay the IRS $200,000 using my AMEX. The "will my charge be approved" tool only goes to $99,999.
CSA function has had a cap of $1,000,000.00 for the entire duration of your Amex membership.
@EricTheCEO wrote:...I complain that I don't have a black card. Magically, this team that everyone at AMEX says doesn't exist...
...My black card is denied for the time being, because "spend is only one element" of their criteria...
... I compliant that I don't have a black card..... because, why not, the Centurion card is cool...
... Still no black card. Continue to complain to AMEX about that via near weekly emails to their Head of Platinum and Centurion products...
I don't recall hearing of anyone at Amex denying the existence of a Centurion team since it was reintroduced (publicly) over 20 years ago; there's even a request invite link on Amex's website to submit a request directly to that team. Personal Centurion Card invites in the US are exceedingly rare. Even double-digit millions in annual spend alone isn't enough. You need to be identified as an influencer and as someone who is likely to attract other HNW individuals to Amex. The gateway to Centurion via Amex OPEN is much more feasible for US cardholders, and if you are placing the amounts of business spending on your personal card that you stated, that would be a far more suitable path although certainly not a guarantee.
@GatorGuy I didn't mean that double-digit millions in spend were required for an invite, just that that amount of "spend alone isn't enough" and doesn't seem to be the reason for selection these days as it often used to be when someone could reasonably expect an invite solely for annual spending in the hundreds of thousands. The Flyertalk threads on Centurion are full of "I spend millions and still no invite" posts. Are both of those fairly recent invites? This change seems to have happened in maybe the past 4 years or so. The spending at designer stores and on luxury goods does seems to jive with their more recent selection criteria.