With the intent to start a new business, I ordered an American Express Business Gold Rewards card back in December 2017. The reasoning for this was that AMEX does not request any official documentation to open up a charge card for your business. Of course, I had already passed their scrutiny by being an existing member for other cards. They do, however, request your best guess about how much income you expect to generate and what level of expenses your new business might have. So, I gave them some conservative estimates on both. Lacking an EIN or any official business filings, I had to give my personal guarantee on the card. At some point, when this does become an official business, I could theoretically shut down the card and start over. Or, I could call them to update the information.
I won’t earn the Membership Rewards sign-up bonus points for opening the new account. I can not justify the necessary spending to get the bonus without any business income. The bonus points would be very handy for a business writing about travel.
I originally intended to set up a business entity using the card to pay for it. For now, I need to prove the business concept. More importantly, I need to prove to myself that I have the dedication to make this work. This is something I have advised to other people looking to start a business. They should go out and make a few sales or transactions to demonstrate to themselves that their business is viable before they sink a great deal of time and money into it. Even better, they can use their earnings to pay for the creation of the business entity. Too often budding entrepreneurs focus on the flash and not the cash.
I discovered another perk this year when doing my taxes. 2017 was the first year that I relied heavily on my credit cards for everyday spend. My checking account has served as a payment clearinghouse for my life insurance, credit card, and other expenses that do not accept credit card payment. It is rare that I need to use my bank debit card, typically for cash at the ATM. This means that all of 2017 expenses were on an AMEX statement somewhere. Using tags for my expenses, I was able to sift out healthcare, moving, business, and other significant expenses. Taking this a step further, having a dedicated charge card for business expenses will make my tax preparation that much easier next year.
Finally, another reason for using a charge card for my business expenses is that despite being the personal guarantor for the account, it does not show up on my personal credit. Therefore, this is a subset of expenses that do not affect my credit card utilization ratios or lower my average age of accounts. In short, the business charge card, which could just as easily been a credit card, exists in some credit limbo somewhere. Once I incorporate, I will change the business name on the card, which should then report to the business credit profile. But, in the meantime, the account is a shared secret between me and American Express.
I want to point out that I purposely got the AMEX Business Gold Rewards card precisely because it is a charge card. Without a regular income, I have no business racking up charges on a credit card. Later on, when I am a wildly successful blogger and speaker, it may make sense to acquire a credit card to finance projects that need more than Net 30 terms. For now, it is sufficient for the Gold card to collect my business expenses separately from my personal accounts.
The TL;DR of it is that getting the AMEX Business Gold Rewards card was a simple way to separate business expenses from personal expenses. AMEX did not request any official documentation, just my best guesses in terms of income and expenses. We will square up the documentation once the business becomes more successful. The card simplifies tax time. And, finally, having a business card does not affect my personal credit despite my personal guarantee.
Oh, and before I forget, my business spending generates Membership Rewards Points.
Extra Points in 5 categories:
- 3X Points on advertising on select media. Applies to the first $100,000.
- 2X points on airfare. Applies to the first $100,000
- 2X points on purchases at gas stations. Applies to the first $100,000
- 2X points on purchases for shipping. Applies to the first $100,000
- 2X points on purchases of U.S. computer hardware, software, and cloud computing purchases made directly from select providers. Applies to first $100,000.
- 1X on everything else. Unlimited.
Note: Extra points categories can have one at 3X by being selected every year. My selection was advertising.
More information on points at https://www.americanexpress.com/us/content/rewards-info/business.html
Some of the other benefits did not affect my decision, already being a member of American Express. Here are the benefits below:
2X Points when booking through AMEX Travel.
- Spend Manager
- Connect to Quickbooks
- Year-End Summary
- Employee Cards
- Account Manager
- Return Protection
- Extended Warranty
- Purchase Protection
- Car Rental Loss & Damage Insurance
- Baggage Insurance Plan
- Premium Roadside Assistance
- Travel Accident Insurance
- Global Assist Hotline
- Relationship Care Service 1-800-653-1693
- AMEX Offers
- No Foreign Transaction Fees
- FX International Payments - could be handy someday if I ever do import/export
- OPEN Forum
- The Hotel Collection