I’m researching the world of business credit card programs wondering if they’re useful to small builders, remodelers and handymen. Aside from the obvious advantages of helping to track expenses, keeping personal expenditures separate from the business, awards and instant loans, has anyone found these cards (and the tools offered with them) to be valuable? Or are they simply gimmicks to get you to sign up for one more credit card?
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Replies
>keeping personal expenditures separate from the business
I think that's a big point for demonstrating that the business and the individual are separate entities, such as for limiting liability to the business assets, for example. Same reason you want a separate checking acct.
need to be sure you can easily distinguish them in your wallet, so you don't pull out the wrong card at the Bada Bing Club.bobl Volo Non Voleo
Expenditures at the bada bing club may be deductible up to a certain percentage. Check with your accountant.Tom
I'm here to help the humans.
I got an AmEx gold....
and a biz checking mac/visa....
sure they help ....
I'd love for the whole world to take AmEx ......that'd really simplify my life....and get me more points!
Jeff
Buck Construction Pittsburgh,PA
Fine Carpentery.....While U Waite
Let me warn you about that Amex Fools Gold you've got there.
Caveat: this story goes back to late 70s early 80s, so things may have changed; I doubt it, though, knowing Amex.
I had a small business in NYC; got myself a personal gold Amex card at one point, and then, for the reasons mentioned in the lead post (keeping it separate, etc.), accepted one of Amex's mail-in offers to sign up for a Corporate card for my company. Got it, trundled on for a while.
There was a bit of a recession, if you older guys remember. I had a rough go; not one but TWO of my major clients went belly up and didn't pay; lawyers told me to forget hoping for anything, I was too far down the list. SO I put my nose to it and started nibbling away at the debts as best I could; late one month here, the next month somewhere else. I didn't take a salary or a draw for 6 months, ate at my buddy's house most nights and thank god cigarettes only cost 8 bucks a carton then. But I made the payroll every week for those I could keep on, and I kept everyone on as long as I could pay them. I'd always treated my vendors straight, so they stuck by me and I kept services going, and eventually I could see the light at the end of the well-known tunnel. We got a couple of new big clients signed up, and it was only a matter of a month or two more before everything would be back on track, all staff rehired, and all debts paid.
Meanwhile I had a stack of Air Canada Air Miles sitting unused, and decided I'd earned a small break. Took $150 and bought a 3-week Eurail ticket and $300 cash to feed my face and sleep in pensions all over Europe. AC flew me to London free, and I had a ticket in my pocket good for a return from Zurich to Montréal. Of course, I also took my personal Amex card--the company card I'd cut in half about six months earlier when Amex got impatient during the worst of the cash-flow crunch. But the personal card had always been paid up on time, and I hadn't even been using it (no point in racking up new debts when you're digging out from under old ones...).
Somewhere in Germany, as the war dispatches used to read, I caught a cold and ran out of cash--I'd really believed that horsemanure about Eurpoe on $20 a day; now I was sick, running a 102 fever, and I needed to get my butt into a cheap hotel for a couple of nights and drink about a barrel of chicken soup and Irish whiskey, alternately, in equal quantities. So, I went to the nearest bank with that little blue sticker in the window and whipped out my checkbook to cash a check, the way they guaranteed they'd do for you with an Amex card. Showed handsome Hans the green card and handed him a check made to cash for $200 US.
He asked for the card, so I shrugged and gave it to him. He said 'joost a mooment' and went behind the back counter. Came back about 5 minutes later. Frowned very Germanically. Reminded me of Colonel Hochstetter from Hogan's Heroes, except he was blond....
"Your Kart is nicht güt, Mein Herr. Ze Amerikkans Zexpress nicht bein...." and so forth. Whatever. I come half from German grandparentage but don't speak a publishable word of the language. Anyway, I demanded he let me talk to Amex on the phone. He smirked, shrugged and passed me the receiver. It was the Amex call center in Phoenix. They'd cancelled my PERSONAL card because there was a debt outstanding on my CORPORATE card. I tried explaining to them that the two cards had nothing to do with each other, that this wasn't Kosher, then realized this probably wasn't the best place in the world to start swearing in yiddish (I'd said a lot more than 'Kosher', heh, heh, oops!). Yeah, I know, but WWII memories die hard...as did a lot of my family.
The sonofa not only kept the card (so what? it wasn't any good) but he KEPT THE CHECK, which WAS good, and made out to cash, to boot. He said AMEX had claimed it because I still owed them money. I started to holler and reach for the check and all of a sudden remembered that cops in Europe all carry submachine guns and maybe I didn't want to have to call the American Embassy....
I had to telephone my office collect, and get them to call the bank in NY and put a stop payment on the check. (While I was at it, I told them to take AMEX's small remaining debt out of the pay-off schedule and let em come looking for it on home turf.)
So finally I used the Eurail ticket to get to Amsterdam where I crashed on one of the barges behind Central Station and the barge owner listened to my story and took my personal check written to him to his bank, cashed it, and brought me back the cash. (Didn't hurt that the Germans were some of the bad guys in the story, of course. The Dutch have long memories, too.)
Jeff--AMEX does not (or did not) give real corporate cards to small business owners. They only give them to D&B-rated corporations with ratings of the sort you see reported on in the financial pages of the newspaper. That card of yours is almost certainly linked to your personal credit. Check the cardholder agreement real carefully. I'll bet you're personally liable for all charges on the 'corporate' card.
Dinosaur
'Y-a-tu de la justice dans ce maudit monde?
Dino,
I hesitate to bring this up in fear of being led down the primrose path of social activisim again. But if you don't have a registered corporation,LLC etc. the seperate card is in name only. And most of the time when you get credit of any sort with even a small corporation you have to guarentee the loan personally. Always been that way to my knowledge. Although you are older, maybe you remember a different time. :-) DanT
Not into social activism in this vein; just reporting the facts, ma'am, as Joe Friday used to say. In any event, you are dead right. My point was that AMEX likes to make people believe otherwise and this can be a trap.
My company in NYC was a regular full-blown corporation, none of this subchapter S nonsense (it predated that anyway). What I'm trying to point out is that what AMEX did (and I'll wager still does) was to market a second card based on the same person's credit AS IF IT WERE a 'corporate' card, by using the word 'corporate' generously in the advertising material they mailed in. So they sold two card contracts instead of one to the same person. Two fees. Two interest accounts. Two different names. But internally linked and inseparable. In my book that makes them slimeballs. Plus their attempt to steal $200 from me through the German bank, which I'm certain even they wouldn't have tried had I been in the US at the time. Don't know what you think about that aspect, but just wanted to pass the word for those who, like me at that time, were too trusting (read 'stupid') to bother reading the 72pages of fine print....
Dinosaur
'Y-a-tu de la justice dans ce maudit monde?
I just created a corp to take over my business andf called Amex to do a corp act card.
it was a very clear and explicit part of the telephone interview that she woiuld be recording the conversation for the record and that she asked if I would personally stand pat for any and all corporate charges made to the card.
my first reply was "Guylp"
Then I said, "Yes"
I suspect that at one time, you did too, but that was then and this is now.
I have a similar memory of a relationship with citibank from an earliere life of mine. It's hard toi be objective but My memory of it keeps me from taking another card of theris.
To the original Q - yes separate business cards are valuable. Not only for the accounting assist onm reports but also to separate from pedrsoanl expenses.
I haver a card for nothing but personal stuff, one for nothing but medical stuff, and a couple for business items..
Excellence is its own reward!
I have been told business cards will not take over the CDW acr insurance (like personal gold cars will) when OVERSEAS< INCLUDING THE CARIBBEAN.
Even at Fortune 500 co with which I'm familiar, the individual is typically responsible for the use of the card. If it weren't for that, people could play all kinds of "hey, I don't work there anymore" games and the company could say, "hey, it was used for personal stuff rather than business, so we ain't paying" and the cc company would be left holding the bag.
Piffin,
Thanks for your input. Do you ever use the "tools" the business card programs offer? Primarily expense management reports. I wonder if these programs aren't primarily driven by the points and awards. My local bank seems to have equal or better online financial tools compared to citi bank and Amer X.
Joe P.
I guess I'm in it but don't know what good it does me. Right now, I don't have time to sit around and study their management tools.
I do get points for purchases that I'll use someday.
Aside - another contractor here is known for the fact that he had a rewards card with a national store - I think they call it an affinity card, wherre they give points redeemable at that store.
He charged all his travel and materials to that card and did wardrobe for the whole family from the store until they asked him to quit. He bought a lot of materials for jobs.
;).
Excellence is its own reward!
They didn't do it that way at the time I was writing about. For one thing, they recorded things but it wasn't yet legal to do so without a beep-tone every 15s, so they never told you. For another, they made every effort to make you feel like you were a CEO of a F500; it was part of their marketing strategy.
The fact I personally had to guarantee the so-called 'corporate' card wasn't the real beef; it was that they froze a completely separate account that had always been paid up to date WITHOUT EVER LETTING ME KNOW UNTIL I WAS F.O.R.D. in the middle of Europe. (And then they had one of their agents--the German teller--physically steal money from me; the fact I was able to stop payment on the check to prevent them from actually getting paid doesn't lessen the fact they stole the paper.)
Dinosaur
'Y-a-tu de la justice dans ce maudit monde?
I'm a sole prop so all my "Biz Credit" is based on "my credit"...don't expect anything else ....
What's the diff to me? I like the Am Ex because we got rid of all our plastic a coupla yrs back and I like that if forces me to pay off monthly....
Although I did sign up for the "extended payment" plan which let's ya make payments on "approaved" purchases over $300 .....And when the tranny went in the work van ...it was well appreciated. Got lazy ...still carrying a balance..which will be paid off in full in just about one month from toady ....like I said....I hate owing the plastic people.
I've had my share of problems with AmEx ..but then banks in genaral hate me...so I'm used to it......someday I'll relate the time they were refusing my $300 charge because the "computer" noticed a diversion from the normal spending pattern...
I was on vacation! I remembered to call it a "business trip" as I MF'd the poor girl who tried to say the computer was doing me a favor...as my train was about to pull outta the station w/o me!
JeffBuck Construction Pittsburgh,PA
Fine Carpentery.....While U Waite
Great story. Very funny. I love the officiousness of Euro bank tellers. Give me the Hispanic and Black kids who populate the windows at my local bank any day. At least they're sympathetic when I run out of money.
Jeff,
Thanks for the note. Do you use their OPEN Small Business Network expense management tools? Apparently, you can access your account online, sort expenses by category, date, card holder and what not. Ultimately, my question is: is a card better for business expenses than a debit card attached to your checking account -- where you can see your revenue and expenses all in one place??
Joe
I'm in the OPEN program ...I'm not big-time enough for it to impress me....
I do the net-pay most months....but they had about 3 different screen to navigate thru ..and most months all 3 screens give a different "balance due" .....
Sometime I even have to call in to see what I really owe!
I have had occasion to track something and doing so on line has helped.
JeffBuck Construction Pittsburgh,PA
Fine Carpentery.....While U Waite