AMEX Financial Review Results

[Anonymous]

I received my AMEX platinum card on October 9, 2018. Me being the stupid teenager I am, I tried to send $3000 via venmo (same day I got my card) to try to get my minimum spend to achieve the 60,000 rewards (I was trying to purchase something). It got denied of course, and I called AMEX to find out that I was placed under financial review. The person (who I later find out would be my manager and I will refer to as X) asked me what the transaction was for, and I told X that it was to purchase an item. X then proceeded to ask what my income was, in order to see if I would be able to pay off anything that I charged on my card. I proceeded to tell X that I make 60k/year. X then proceeded to ask where I worked and what I did. I told X I was self employed and have a business where I sell shoes and clothes online. The problem with this was, it wasn't an official business (since I just sold on platforms like facebook, twitter, etc.) and I didnt have any taxes from it. This kinda put me in a gray area since I wouldnt be able to provide X my taxes from the previous year. I did start a job as  a server a month before I received my card and had paystubs. X told me to send in my paystubs and bank statements from the bank that I had linked with AMEX and another bank If I wanted to. At this point, I was super worried because my pay stubs showed that I only made around $13-$15/hour since I never declare my cash tips. Also, the bank account that was linked to my AMEX was new, so for the month of August, there was 1 transaction and the account had like $40, and for the month of September, it only had a few transactions and had a balance of $1,000. I also added my Bank of America statement, which had 30k in transactions in 2 months, which I hoped would prove that I'd be able to pay off whatever I charged on my card. I turned in all my documents on the 10th of October, and I proceeded to call X on thursday, October 11. X told me that the Bank of America statement would be useless since it wasn't from the past two months (August and September). This made me think that AMEX would definitely close my account because the info I gave them showed that I made only 15k/year as a server and that I only had $1000. I prepared myself for the worst (closure of my account); however, on the evening of October 15 I received an email saying that my card now has a limit of $5,000. It still shows as suspended since X is not in office today and hasn't updated my account yet, but I'm pretty sure with AMEX placing a limit on my card, that means that it won't be closed! Lesson of the story is, if you're placed under AMEX financial review, don't be scared of them closing your account and don't do transactions that'd make you pop out and cause a FR. If you are placed in FR, they will most likely just place a spending limit as long as you send in whatever documents they request and make sure to follow up with them frequently to show that you want to keep your account (I called everyday). I hope that you all learn something from this "article" and don't make the same mistake as I did. 

Some extra info: I only have 1 additional credit card, discover student, have never missed a payment (always paid my balance in full every month). I've only had this card for 2 1/2 months though. 

[AverageJoesCredit]

I would say the lesson here might be if you are new to Amex , and more or less credit, dont try to get as SUB in one day with a huge purchase that will set off flags. Also make sure you can prove your income in case s FR does pop up.

[FinStar]

OP, given the context of not only this thread, but the one below as well, why not stick with transactions or something that doesn't draw such attention?

https://ficoforums.myfico.com/t5/General-Credit-Topics/Does-a-refund-count-towards-my-rewards/td-p/5...

[Anonymous]

I made the transaction before any of the replies on the previous thread were posted  I do make occasional weird purchases, ex: If an item which I want to sell costs me $4,000, what should I do to in order not to raise any red flags? Contact them ahead of time?

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@FinStar wrote:
OP, given the context of not only this thread, but the one below as well, why not stick with transactions or something that doesn't draw such attention?

https://ficoforums.myfico.com/t5/General-Credit-Topics/Does-a-refund-count-towards-my-rewards/td-p/5...

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[beutiful5678]

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@Anonymous wrote:

The problem with this was, it wasn't an official business (since I just sold on platforms like facebook, twitter, etc.) and I didnt have any taxes from it. This kinda put me in a gray area since I wouldnt be able to provide X my taxes from the previous year.

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OP, this isn't directly related to the actual topic of your post but you have bigger problems than an AMEX financial review. The IRS may find out eventually and they will come after you for back taxes, interest, and penalties (not to mention your state and/or municipality coming for sales taxes, if applicable) - it doesn't matter if you are an "official business" or not.

You sound young and perhaps inexperienced and this could potentially put you in a world of hurt if you don't get your records and taxes in order.

[Anonymous]

I just buy limited edition shoes and clothes online and sell em on Facebook and other websites such as StockX.com

[beutiful5678]

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@Anonymous wrote:
I just buy limited edition shoes and clothes online and sell em on Facebook and other websites such as StockX.com

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It's unclear why you think this puts you beyond the reach of the IRS and your state and local Departments of Revenue...

[Anonymous]

I mean, I know people who do the same thing I do and never go through the IRS or anything.

[Cred4All]

Op, to be specific, Online selling is a business regardless of if it's part-time or full-time.  Any income therefor would be required to be reported on the appropriate IRS tax form and taxes paid accordingly.  Is that a bummer, sure is, but income is income.  The point is simply that selling that type of merchandise online, and subsequently apping for a credit card as a business, the IRS will then be aware of it so just be on the straight and narrow.

As an example.. I purchased a domain name for $7 back in 2004.  I built a simple website and held onto it until 2014.  I sold it at auction for approximately $14k.  I thought it was a financial windfall, but guess what, I reported that income and paid about $2500 in taxes on it to stay on the straight and narrow.  Is what it is .  So even something you own yourself and sell is technically subjected to Uncle Sam.

[beutiful5678]

Yes, to elaborate more now that I have time, any money you make is subject to taxation unless specifically excluded by our tax code.

To explain further how this could get you in trouble--

By January 31st, 2019 Stockx.com (and any other vendor that has sent you money - PayPal?) will send you and the IRS a 1099 that will show the amount of money they've sent you in 2018. If you don't put that on your tax return it will sent up massive red flags and will likely get you audited, especially since you are operating a five-figure business.

If you want to do this properly, use a Schedule C to report all business income and all business expenses to get your net income. This net income will flow through to your 1040.

You should probably enlist the help of an accountant or bookkeeper to sort this out - presumably you've been commingling business and personal since you don't think you're an actual business.