@Dare
Not all corporate cards are set up where the employee is personally responsible. Some are set up where the company is solely responsible for all charges, directly pays the bill, and the creditor cannot come after the individual cardholder, only the company (now if you don’t submit expense reports etc that’s not to say your company won’t fire you or withold wages, but it’s between the employer and employee in that instance).
Sable said:
@Zaire
These’s honestly no difference. You’re responsible to pay off your corporate card regardless if your company is not reimbursing your expense
Yeah that’s exactly my point…
Actually, “best practice” is having the company centrally manage it, negotiate directly with an issuer, and capture rebates for itself. Your company is pushing this onto you to avoid credit risk and to reduce administrative costs involved in chasing you down for personal expenses put on the card.
Which now involves making you use your personal credit to finance company expenses. Fine if you want rewards for yourself. Not so fine if your credit profile does not support a credit line sufficient to float the company’s expenses.
If you cannot easily get a $2,500 card for this, talk to your HR department about getting an exception. Because no bank is going to waive its underwriting requirements for your company. Unless the request goes through the company, and the company guarantees your credit line.
You also don’t want merely a $2,500 card that will be constantly maxed out to support your spending on behalf of your company. That will permanently, negative impact your credit score. To support an anticipated $2k per month in spend, and to allow time for expense reports to be processed, ideally you’d want a card with a $15-20K credit line in order for your score to not be impacted by your utilization.
I promise you exceptions are a thing, because the senior executives at your company will not be changing how they treat their own expenses.
I use my credit card for work all the time with some pretty large expenses for me (sometimes $4-5k/month). Some things to consider off the top of my head, both good and bad in no particular order (sorry if these are obvious):
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This can be great for points and building credit. I have a cash rewards card and probably get $1k+ every year free money. My credit is up pretty much 100 points since starting work 6 years ago without missing payments.
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Ask your current bank/institution for credit limit increases. Your limits may go up pretty quickly and it can be a better option than getting new cards (really depends).
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Make sure EVERYTHING you buy is refundable and/or reimbursable. My company is good so if something doesn’t work out I get reimbursed, but you can really get burned on things like airline tickets and services when plans change. Save all your receipts and take a picture on your phone as soon as you have the receipt.
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Make sure you understand reimbursement timelines. My work takes up to 2 weeks to reimburse. Some companies are faster, and some are horribly slow. Make sure it’s short enough that you won’t be stuck with a charge on your account.
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Sign up for as many rewards programs as you can.
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Your account balances might fluctuate wildly. Don’t get tempted to spend more than you have because you expect an old reimbursement to come through. I usually keep a healthy buffer to avoid this, but you can also track personal vs work spending if that’s easier for you.
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If you’re really desperate and can’t afford something you might be able to get a cash advance from your company. Check your handbook and ask your boss on the policy.
If you have an adequate income and credit history of at least a year, most major issuers (Chase and Amex in particular come to mind) will easily give you a card with at least a $2500 limit. Note that in the long run this is better for you, since you can earn points and SUBs on expenses that will be reimbursed.
If they fire you what happens to expenses you haven’t been reimbursed for?
Your company is lazy and doesn’t want to deal with having to lay out the funds ahead of time when they can dump the responsibilities on their employees instead. There’s NOTHING stopping them from getting a corporate Amex account.
In the short term , what about a credit limit increase on your existing card(s)?
If yo otherwise have a good credit history, you could regularly be applying for a card once every 5 months and just keep hitting sign up bonus after sign up bonus.
That’s awesome. Free points!
Absolutely not. Worked briefly for an office that asked of the employees to do this. Their reason instead of using business account was that they were far too over leveraged with debt. Even if there are points or travel, my personal line of credit is mine, not belonging to the company I work for. Boundaries people.
You should apply for a Business Card. You do not need a business to get one, and they don’t report to CRA unless you become delinquent.
Lael said:
You should apply for a Business Card. You do not need a business to get one, and they don’t report to CRA unless you become delinquent.
You need a business. The definition of business is just very broad.
@Blayne
Another way to phrase that you don’t need a business.
Lael said:
@Blayne
Another way to phrase that you don’t need a business.
Only if you want to be incorrect.
Lael said:
You should apply for a Business Card. You do not need a business to get one, and they don’t report to CRA unless you become delinquent.
You can apply for a business card with a SSN instead of an EIN, but you do need to at least be a “sole proprietorship”. Gig economy stuff will work for that. But you can’t apply for a business card and say “I don’t have a business”.
You need an emergency fund. NEVER use a credit card for anything you don’t currently have the money to pay for.
Thayer said:
You need an emergency fund. NEVER use a credit card for anything you don’t currently have the money to pay for.
I do have an emergency fund. I just don’t like the idea of being near my limit on a regular basis
@Zaire
With most issuers maxing a card and paying in full will result in a CLI after three-ish months. That would solve your problem if you’re not interested in churning.
Thayer said:
@Zaire
With most issuers maxing a card and paying in full will result in a CLI after three-ish months. That would solve your problem if you’re not interested in churning.
That might be my best bet actually. Thank you
The average credit card sign up bonus requires about $4k in spend over about 3 months.
With an extra $2.5k a month of spend that’s reimbursed, you can do a credit card SUB every two months or so.
Since each sub is worth $400-800 or so, you’re effectively earning an extra $200-400 a month of points (which aren’t taxed) for as long as you do this.
You can probably clear $4,000 worth of free travel per year, easily, if you put the spending towards SUBs.