Entrepreneurship & Small Business

What personal credit cards have shut you down for business use?

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Mar 13, 2003
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What personal credit cards have shut you down for business use?

I think we can all agree... there is a lot more selection in personal credit cards vs business credit cards.

So far I've been using Chase & MBNA personal cards and they haven't said anything yet, but I'm only a few months in. I routinely wonder when somebody will phone or mail me telling me to stop.

I've heard Cap1 is fairly diligent in stopping business use but I haven't heard any other anecdotes.

Anyone been slapped around recently?
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Here 'n There
I am wondering just what is deemed business. For example, I pay a 3PL warehouse in the US that warehouses inventory for me about $100/mos, Google for Business $5/mos to host my 1-user company email, my cloud inventory & accounting software about $80/mos and my website hosting company $4/mos, all in US funds, on my amazon.ca VISA. Is that going to get me flagged? Is it a matter of business use vs personal use in terms of too high a percentage business? Is it a matter of the type of business charges?

Just what kind, volume and size of business charges get flagged?
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eonibm wrote: I am wondering just what is deemed business. For example, I pay a 3PL warehouse in the US that warehouses inventory for me about $100/mos, Google for Business $5/mos to host my 1-user company email, my cloud inventory & accounting software about $80/mos and my website hosting company $4/mos, all in US funds, on my amazon.ca VISA. Is that going to get me flagged? Is it a matter of business use vs personal use in terms of too high a percentage business? Is it a matter of the type of business charges?

Just what kind, volume and size of business charges get flagged?
I think it varies by credit card issuer, so there is no real answer to any of those questions.

But if they took the time to care they have all sorts of merchant codes. For example, what if a merchant was tagged distributor/wholesale? Seems pretty obvious that's not personal if it's there all the time.
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scouzer wrote: I think it varies by credit card issuer, so there is no real answer to any of those questions.

But if they took the time to care they have all sorts of merchant codes. For example, what if a merchant was tagged distributor/wholesale? Seems pretty obvious that's not personal if it's there all the time.
I have bought a ton of things from wholesalers, distributors and retailers over the years for personal use. I've never been flagged. Perhaps it is something a bit more definable than that.
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Not flagged yet either on mbna. I think amounts and consistent large amounts factor into it though cannot shed much more light on this. Colleague of mine who runs a car shop was flagged as he was buying tires from the same supplier.
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ichpen wrote: Not flagged yet either on mbna. I think amounts and consistent large amounts factor into it though cannot shed much more light on this. Colleague of mine who runs a car shop was flagged as he was buying tires from the same supplier.
Was he using MBNA?
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ichpen wrote: No it was some rbc card.
I suppose that makes more sense - RBC has a full compliment of biz cards, so they have more incentive to force people to upgrade.

Not sure what the upside is for places like MBNA with no biz cards.
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It seems to me if there are both regular and a significant charges that can reasonably be deemed for business use, especially when they outnumber both in frequency and dollar value the personal expenditures, that there is a greater chance of being flagged and denied use of the card for business purposes.
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scouzer wrote: I suppose that makes more sense - RBC has a full compliment of biz cards, so they have more incentive to force people to upgrade.

Not sure what the upside is for places like MBNA with no biz cards.
I can't speak for MBNA but I bet if you were dropping 20k+ per month from the same supplier they'll eventually come down on you. You're not the type of customer they want for a consumer card. My charges are fairly diverse each month though quite substantial which is why I suspect I've slipped through the net thusfar.
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^ same here. I had an Amex platinum in the past, the TD visa infinite, and now using the Costco capital one MC.

The usage is fairly substantial, though less now than before, but very diversified, so I've never been flagged.
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So I've been using my MBNA card hard for biz expenses and the 13k limit wasn't cutting it.

So I applied for a boost to 30k, the credit rep asks "Is this for business use?" I answer honestly: "Yes, sometimes."

She does not care at all. Approves my new limit.

So FWIW it does not seem MBNA cares.
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Why does the bank care?
I've been using personal Visa for 15 years. Don't do that much anymore, but used to do $4000-$5000 per month, not sure if that's considered a lot or not. I do about $10k per month in purchases, but two of my suppliers want to charge me 3% so I don't use Visa that much anymore.
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The banks care because of the rewards payout

I believe that the merchant fees go to the credit card companies but the rewards are paid out by the issuing bank

The banks only make money if you carry a balance. If you're not carrying a balance, you're a bad customer to the bank but a great customer to the credit card companies
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Aug 2, 2009
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From RBC business banking... To my knowledge none of my clients have been cut off from using personal cards for business use as long as the supplier is charging under an authorized card holder name. The issue with using your personal card would typically be a book keeping/accounting issue dependent on the structure of the business.

Using your personal credit card would require you to do the manual tracking/compiling of what is business and what is personal on a monthly basis (time consuming). A lot of times most business owners are not dilligent in tracking this until tax time.

In addition to this if the structure is a Corp, being aware that the accounting may cost more as paying for expenses using personal credit would be considered a shareholder loan which would need to be repaid by the business which would be more work for your accountant at year end for each potential transaction.

At RBC the benefit of a business card really comes down to convenience(admin), cost (accounting), prestige (charge it to the business card) and flexibility (issuing employees expense cards)

Most FIs will have comparable rewards programs business and personal these days.

Now to the individual who suggested the bank makes all the money off interest charges, although this it cannot be denied we do earn money in VISA interest the bigger business will be collecting a split of merchant fees which is shared between the FI and VISA/MC. It's part of the reason the banks have yet to come to an agreement with mobile wallet apps like Apple pay, its just cutting into a huge part of their business. In the US its believed to be about .15% of every charge.

Brian

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brianfurtado2430 wrote: From RBC business banking... To my knowledge none of my clients have been cut off from using personal cards for business use as long as the supplier is charging under an authorized card holder name. The issue with using your personal card would typically be a book keeping/accounting issue dependent on the structure of the business.

Using your personal credit card would require you to do the manual tracking/compiling of what is business and what is personal on a monthly basis (time consuming). A lot of times most business owners are not dilligent in tracking this until tax time.

In addition to this if the structure is a Corp, being aware that the accounting may cost more as paying for expenses using personal credit would be considered a shareholder loan which would need to be repaid by the business which would be more work for your accountant at year end for each potential transaction.

At RBC the benefit of a business card really comes down to convenience(admin), cost (accounting), prestige (charge it to the business card) and flexibility (issuing employees expense cards)

Most FIs will have comparable rewards programs business and personal these days.

Now to the individual who suggested the bank makes all the money off interest charges, although this it cannot be denied we do earn money in VISA interest the bigger business will be collecting a split of merchant fees which is shared between the FI and VISA/MC. It's part of the reason the banks have yet to come to an agreement with mobile wallet apps like Apple pay, its just cutting into a huge part of their business. In the US its believed to be about .15% of every charge.

Brian

Sent from android device.
I've yet to find a business card that comes close reward levels that some of the more elite cards give out. Looking at my own TD business portfolio, it's pretty tragic. Admittedly better banks out there with better biz cards but still in my opinion few that match say an MBNA World Elite in terms of cashback as an example.
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ichpen wrote: I've yet to find a business card that comes close reward levels that some of the more elite cards give out. Looking at my own TD business portfolio, it's pretty tragic. Admittedly better banks out there with better biz cards but still in my opinion few that match say an MBNA World Elite in terms of cashback as an example.
I don't think any of the chartered banks can compete with top consumer cards out there.
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brianfurtado2430 wrote: I don't think any of the chartered banks can compete with top consumer cards out there.
So why did you state "Most FIs will have comparable rewards programs business and personal these days."

There's nothing comparable between business and personal. Fair point a bit of extra book keeping is required but at the end of the day business cards do appear to be a bit of a cash grab by issuing banks hence the aversion from a lot of small business owners. I doubt many SMB owners care for prestige these days when credit is plentiful and most transactions are done online or over the phone.

I have a couple of biz cards, mainly because they were forced upon me i.e. here you're pre approved may as well take it type of deal. Never used them. Don't cost me anything to keep but if the FI in question wants me to forego many hundreds of actual dollars in rewards I make on my personal card every month they will need to do better.
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ichpen wrote: So why did you state "Most FIs will have comparable rewards programs business and personal these days."

There's nothing comparable between business and personal. Fair point a bit of extra book keeping is required but at the end of the day business cards do appear to be a bit of a cash grab by issuing banks hence the aversion from a lot of small business owners. I doubt many SMB owners care for prestige these days when credit is plentiful and most transactions are done online or over the phone.

I have a couple of biz cards, mainly because they were forced upon me i.e. here you're pre approved may as well take it type of deal. Never used them. Don't cost me anything to keep but if the FI in question wants me to forego many hundreds of actual dollars in rewards I make on my personal card every month they will need to do better.
Sorry I maybe should have been clearer.

The rewards programs chartered FI's offer are not as great as some of the top top rewards programs but the offerings are still competitive.

Frankly, can you blame them? Any of the 5 FI brands are so recognizable in Canada they do not need to buy your business. Sure they lose a few clients credit cards, but for every 1 person that opts for a competitors card they have 9 others that they are making premiums off of by not offering the top notch rewards return.
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I was shut down by the Chase Marriott visa recently when I called them asking if I could apply for the card for a business.
I don't know why they care to differentiate so much but I'm sure they have their reasons.

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