American Express Membership Rewards - American Express for Small Business Travelers-Issues

I work for a small start-up and have had some interesting experiences with American Express. The information provided below is true, accurate, and verifiable business practices. It serves as a warning to "small business" users of the American Express card.

Having one card payment received 34 days after the "statement date" and ALL employee cards, and Optima cards can be "frozen", sometimes stranding people "on the road".

If a business runs into "temporary cash flow problems", and makes payment arrangements, and keeps those payment arrangements, all cards may still be cancelled (including any Optima accounts, whether they are delinquent or not).
If one account becomes delinquent, ALL other accounts, including Optima (which you can normally pay off in monthly installments), becomes IMMEDIATELY DUE AND PAYABLE IN FULL, even if all payments on that account have been made on time.
Why do big companies use American Express Corporate Cards? Because many large companies get them for $5.00 per cardmember per year, and 90 days INTEREST FREE to pay them! How do they make money? Nearest I can figure is on high merchant fees and the $55-75/year membership fee, plus steep delinquency fees (hundreds of dollars in some cases), for being 45 days late.
Ever wonder about the "no preset spending limit"? It doesn't mean that you have no credit limit. It means that they just won't tell you what it is. They approve transactions on a case by case basis. If you exceed this "hidden limit", you could be stranded or have your card refused at a big business dinner. In spite of a successful Amex ad campaign, how embarrassing would THAT be??? The down site is that the limit is unknown to you, so it's out of your control. It is in theirs...
Just, keeping your eyes wide open, and when you travel, carry an extra card, so you're not stranded...

No preset spending limit:
The "hidden" limit is based on your user profile, and what Amex knows about your
financial status.

If you charge a monthly average of 200$ on the card, and try to buy five golden Rolex for your family members, the transaction should not be approved !

The difference with other cards is that you always have the possibility to charge an UNUSUAL amount on your card by calling Amex BEFORE and telling them.
Then, the transaction will be pre-approved.

Originally posted by ontheroadagain:
Having one card payment received 34 days after the "statement date"...

The company should pay the bill on time, or notify AMEX that they will be a few days late, or offer partial payment up front??

Originally posted by ontheroadagain:
If a business runs into "temporary cash flow problems", and makes payment arrangements, and keeps those payment arrangements, all cards may still be cancelled (including any Optima accounts, whether they are delinquent or not).
If one account becomes delinquent, ALL other accounts, including Optima (which you can normally pay off in monthly installments), becomes IMMEDIATELY DUE AND PAYABLE IN FULL, even if all payments on that account have been made on time.

Maybe to reduce liability?

I worked for a few start-ups myself, one of which is in liquidation, and still owes the entire staff 3 weeks salary...

Maybe AMEX is being this way b/c your company is a start-up company, and they are taking a great risk by issuing it cards?

My rashess isn't towards you, but rather the people who run the company.. They [company] could care less if they paid their bills late, right?

Cross default clauses are common in financial contracts. Your Citibank card is the same way. Default on your Citibank Visa payment and they can call your Citi Mortgage in default. Just FYI.

For many credit card accounts these days, it's even worse than what keithnj973 said above. I'm sure most people are aware that most credit card account agreements have a clause which allows them to raise the interest rate to some large amount (often 24% or more) if you become seriously delinquent (60 days or so). But, I've noticed a clause recently that can trigger this if you are late on any account with ANY creditor. So, let's say you just stop paying your American Express bill, and they report you as 60 days past due. Your Citibank interest rate can then rise to the default rate when they see the Amex delinquency on your credit report, even though there's no corporate relationship between Amex and Citibank!

Originally posted by Steve M:
So, let's say you just stop paying your American Express bill, and they report you as 60 days past due. Your Citibank interest rate can then rise to the default rate when they see the Amex delinquency on your credit report, even though there's no corporate relationship between Amex and Citibank!

Credit cards, are the root of all evil!! Tis why I love my AMEX!!