I just saw a commercial for American Express cards. The one they were offering had a cash-back option, some percentage of the usage tossed back to the user. It’s billed as a neat feature, more money for your small business but really, every business-person knows (or should know) that it’s a false economy. Money back is really just reimbursed interest and it would be better to simply not pay that interest in the first place.
I know many workers use an Amex card for business travel. It’s almost standard procedure for the big companies. Most are fully reimbursed by the employer.
Is the cash-back thing an incentive for the business card user? A wink-wink bribe? A way to say, “Hey, wanna keep some of that reimbursement for yourself?”
If the card is a company card, then there’s likely a master account number where all of the underlying cards are billed and it’s that account number (under the name of the business) that would get any reimbursement. No benefit to the individual card holder.
It used to be that AMEX didn’t charge interest. you had to pay the balance every month. I’m not sure if that’s still the case, though. I seem to recall that it isn’t.
Amex charge cards do not charge interest, they are meant to be paid in full every month. They also offer credit cards which operate like other credit cards and charge interest after a grace period. That being said, its possible to use a credit card and never pay a penny in interest, by paying the balance every month, so I’m not sure what the question on the table is.
I use a money back card. 5% on gas and grocery store purchases, and 1% back on everything else.
I pay the balance every month and have never paid a dime in interest, but once a year I get a check from them for some amount of money. Last time it was $110! Felt like free money to me.
Like wasson, I have a card that gives me a percentage back, but I pay it off every month. It’s like getting a 1% - 5% discount on everything I buy. I redeem my points in Target gift cards. I love it.
We have American Express corporate cards for work but the employee has to pay American Express directly. The bill is submitted for reimbursement so presumably any discount (cash back) would be deducted, but I guess you could submit the receipts instead and pocket the money. Of course that would be unethical and stealing from the company.
I think the OP was talking about sending a check separately to the cardholder, though. If the employee has two credit cards, both of which he has to pay himself, and get reimbursed, is paying the employee cash to choose the AMEX over the other a corrupt practice?
I think it’s corrupt for the employee to keep the money, so it should have no bearing on which card they use. Perhaps if our company encouraged one over the other so their discount would be higher?
From what I’ve heard, the cash back benefits aren’t from interest charged to the accounts, at least not entirely. Since the CC company charges a fee to its agents, some of that money can be reimbursed to you.
That was my experience as well. It was against company policy to incur extra expenses for the purpose of getting more miles/points, but otherwise rewards were ours to keep. Its not stealing if you are taking something with permission.
That was a subject of controversy when these programs started. ISTR that the government requires government travelers to give their points to the government. Any government employees know?
When I first got a company card, we were encouraged to use it since the company could tally up charges for various hotels and rent-a-car companies in order to negotiate better discounts. (This was AT&T, where there was a lot of clout.) If so, it would seem simple for the company to get a rebate on the entire bill - cheaper for the card company also. Personal charges on cards were strongly discouraged.
When I first started with the Bell System, in 1980, we didn’t have cards, and weren’t supposed to even use personal cards. Airfare and cars were direct billed, and we got a cash advance for meals and hotels. We were not allowed to use personal cards except in emergencies since there was fear that the company would be responsible for an employee not paying off the charge. Anyone know if this was ever true, even for business cards? It seems unlikely to me.