Should I get a business or personal credit card?

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benhollberg
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Should I get a business or personal credit card?

Postby benhollberg » Tue Jul 16, 2013 10:47 pm

So I have been running my own business for a little while now, currently all my business (or most) expenses have been charged to my AMEX PRG card. This is a personal account, I also have an AU on the account in my name also that I use for personal charges, as it is free for a second card. I have always planned on upgrading to Platinum when I am invited (13 months in August), however for the second time I have received a Platinum business invite, both with a nice 100,000 MR point incentive. The first time I didn't take the offer but am seriously considering it now. A few questions and looking for a little advice.

If I do apply for the business platinum I would probably close my PRG account and then get an AU from the business with my name on it (for personal charges). I know it costs a little extra but its worth it to keep everything separate I believe. I have just under $200k in expenses each year (expecting it to go up each year also), right now this is all charged to the personal card and I think helps my credit, as it shows I can handle and pay off easily. I thought business cards don't use your SSN, but instead the federal tax ID? So if I switch will my personal credit take a hit because it won't be showing all those charges being charged and paid off?

Also what are the differences between the AMEX Platinum business and consumer, I don't see much differences from their website but I see a 20% rebate when you use MR points to book travel. Is that not on the consumer and is that only if you book business class? Any other differences? I assume the rest is the same?

I almost can't resist the 100,000 point sign up bonus but always kinda wanted a Platinum card personal. Anything else I should know about? Thanks in advance.
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Kaiokenryu
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Postby Kaiokenryu » Tue Jul 16, 2013 11:31 pm

How would that work? I thought AU cards still had to be used solely for business to avoid co-mingling. I'm really interested in that idea....it has wonderful implications.

benhollberg
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Postby benhollberg » Wed Jul 17, 2013 10:15 am

I wasn't aware that AU cards were supposed to be only used for business, is that true then? Also co-mingling, what's that? I had two personal cards in PRG, one was an AU is for personal and the primary for business. Both have name on them. Is that against AMEX rules?
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benhollberg
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Postby benhollberg » Thu Jul 18, 2013 9:37 am

I did a little more research and it looks like an AU on the AMEX Platinum has a $300 fee. So now I am not sure exactly what I'll do but am thinking just upgrade my personal PRG to Platinum when I get the invite and either get AU for business on that or get a business Gold AMEX which would be the exact same cost.
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flan
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Postby flan » Thu Jul 18, 2013 8:10 pm

benhollberg wrote:If I do apply for the business platinum I would probably close my PRG account and then get an AU from the business with my name on it (for personal charges). I know it costs a little extra but its worth it to keep everything separate I believe. I have just under $200k in expenses each year (expecting it to go up each year also), right now this is all charged to the personal card and I think helps my credit, as it shows I can handle and pay off easily. I thought business cards don't use your SSN, but instead the federal tax ID? So if I switch will my personal credit take a hit because it won't be showing all those charges being charged and paid off?


AMEX will require a personal guarantee from you. That means that even though it's a business card and might be issued to a corporation, you, personally, and on the hook for the charges. They don't report the card on your personal credit, unless you're late, but may, or may not, report to business credit bureaus. That's good and bad. The bad is that you don't get the benefit of the good account history; the good is that you can not worry that business cash flow issues mean you have to carry a balance and effect your personal utilization numbers (or worry about reporting a balance, if you're one of those people.), and if they're reporting to Experian for Business et al, it will make it easier for the business to get credit on its own.

Co mingling is mixing personal and business expenses and money. Separate accounts can make easier to prove that your business expenses are real business expenses, and not just personal expenses you're pretending are deductible. Mixing money raises red flags for the tax man, and one of the things that lawyers look for when trying to prove that a corporation isn't really a corporation, but just the person who owns it.

benhollberg
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Postby benhollberg » Thu Jul 18, 2013 10:05 pm

Thanks for the advice, I get it now. I am pretty sure I'll just stop with the personal and business AU when I upgrade my PRG to Platinum next month and them probably get the Gold Business card as it's $175 AF just like the AU for Platinum (personal, $300 for business). I was looking at the Plum but since I pay my card off every month I don't see the need for 2 month float, discount was nice but I think I like MR better. Question real quick, are the MR combined into one big pot from my business and personal cards or are they separate?
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