Generate spend by setting up a business

Old Apr 26, 17, 5:05 pm
  #1  
Original Poster
 
Join Date: Dec 2014
Location: EDI, HKG
Programs: British Airways Executive Club Gold
Posts: 1,067
Generate spend by setting up a business

Is it even legal to set up a small business, getting a payment service that takes card payments then pay your business by your Amex card and withdraw the money to the bank account in order to pay your credit card bill?
cysyuen is offline  
Old Apr 26, 17, 6:27 pm
  #2  
 
Join Date: Apr 2009
Location: SoCal, TLS, JAX, MOB, PHF/ORF, PVD
Programs: AA/US ExPlat & 1.05MM, AF C2K, UA dirt
Posts: 3,169
Originally Posted by cysyuen View Post
Is it even legal to set up a small business, getting a payment service that takes card payments then pay your business by your Amex card and withdraw the money to the bank account in order to pay your credit card bill?
IIRC, that is a violation of various payment processors' T&Cs. I'm not sure how much they go into investigating it though.
fgirard is offline  
Old Apr 26, 17, 11:12 pm
  #3  
 
Join Date: Jun 2015
Posts: 353
Originally Posted by cysyuen View Post
Is it even legal to set up a small business, getting a payment service that takes card payments then pay your business by your Amex card and withdraw the money to the bank account in order to pay your credit card bill?
Good luck with the 1099-K you will be receiving along with the 2.5% in merchant fees you will be incurring.
Flyby01 is offline  
Old Apr 27, 17, 12:09 pm
  #4  
 
Join Date: May 2016
Posts: 526
What a dumb idea.
cashcyclone is offline  
Old Apr 27, 17, 3:57 pm
  #5  
 
Join Date: Oct 2009
Location: Land of the parrots and parrotheads
Programs: Several dozen
Posts: 4,818
Legal - yes. Reporting back your subsequent experience with the payment service falls under setting up an entertainment company. Popcorn here, get yer popcorn here!

Originally Posted by cysyuen View Post
Is it even legal to set up a small business, getting a payment service that takes card payments then pay your business by your Amex card and withdraw the money to the bank account in order to pay your credit card bill?
AlohaDaveKennedy is offline  
Old Apr 27, 17, 4:43 pm
  #6  
 
Join Date: Feb 2015
Posts: 535
Geez, wasn't this same question just asked like 5 days ago?

http://www.flyertalk.com/forum/manuf...-acccount.html


OK, 8 days.
shadow520 is offline  
Old Apr 27, 17, 5:17 pm
  #7  
 
Join Date: Feb 2015
Location: SFO
Programs: United Gold (frmer. 1k and GS), AAdvantage Platinum, Alaska MVP Gold, HHonors Gold
Posts: 170
Originally Posted by Flyby01 View Post
Good luck with the 1099-K you will be receiving along with the 2.5% in merchant fees you will be incurring.
Square, at least, only issues 1099-k's to businesses w/ more than 20K sales AND 200 transactions.

That being said, shutdown would be pretty quick.
lesamuel is offline  
Old Apr 27, 17, 8:02 pm
  #8  
 
Join Date: Jul 2016
Posts: 62
Originally Posted by cysyuen View Post
Is it even legal to set up a small business, getting a payment service that takes card payments then pay your business by your Amex card and withdraw the money to the bank account in order to pay your credit card bill?
Why not just research Retail Arbitrage and reselling. Buy things for a discount in bulk or just get a deal and then sell it. All this requires is spare time, organization and market research.
joeaseer is offline  
Old Apr 29, 17, 9:40 am
  #9  
 
Join Date: Aug 2004
Location: MGM
Programs: United Silver, PC Plat/Amb, HH Dmnd
Posts: 768
Like toadstools after the rain, this "idea" is a perrenial favorite. Kind of like killing Hitler...
http://www.tor.com/2011/08/31/wikihistory/

In short, it won't work. It will never work.

Andyandy
andyandy is offline  
Old Apr 29, 17, 3:03 pm
  #10  
 
Join Date: Oct 2009
Location: Land of the parrots and parrotheads
Programs: Several dozen
Posts: 4,818
Now, now never say never. Where there's a will there is always a lawyer.

Originally Posted by andyandy View Post
Like toadstools after the rain, this "idea" is a perrenial favorite. Kind of like killing Hitler...
http://www.tor.com/2011/08/31/wikihistory/

In short, it won't work. It will never work.

Andyandy
AlohaDaveKennedy is offline  
Old Apr 29, 17, 8:24 pm
  #11  
 
Join Date: Feb 2015
Posts: 14
This is actually a good way of getting around Am3x's once/lifetime bonus rule. I did it many yrs ago, got all my Am3x cards shut down and was banned for life. New life started less than 2 yrs later. Voila.

I did it out of idiocy. But if you know better, & have the juevos, it can be lucrative...
TyroneSchulase is offline  
Old May 6, 17, 6:19 pm
  #12  
Original Poster
 
Join Date: Dec 2014
Location: EDI, HKG
Programs: British Airways Executive Club Gold
Posts: 1,067
Thank you for all the replies -- clearly, I was clueless so decided to gather some feedback here. I have no plans of opening a Square account just for that, rather I got this question in mind as I have seen plentiful of adverts on the web.
cysyuen is offline  
Old May 6, 17, 7:11 pm
  #13  
 
Join Date: Nov 2015
Posts: 84
I actually tried this.. Several times with different payment processors. IRS nightmares aside (was a pricey PITA), I didn't last more than 2 months at a single processor operating a "restaurant".

Not worth the aggravation.
1PercentClub is offline  
Old May 7, 17, 5:00 am
  #14  
Original Poster
 
Join Date: Dec 2014
Location: EDI, HKG
Programs: British Airways Executive Club Gold
Posts: 1,067
Originally Posted by 1PercentClub View Post
I actually tried this.. Several times with different payment processors. IRS nightmares aside (was a pricey PITA), I didn't last more than 2 months at a single processor operating a "restaurant".

Not worth the aggravation.
It would be an expensive move but surely someone can transfer money via PayPal to get bonuses?
cysyuen is offline  
Old May 7, 17, 9:00 pm
  #15  
 
Join Date: Dec 2001
Location: Coconut Creek, FL
Programs: AA Lifetime Platinum-2 MM Starwood Plat,Delta DM
Posts: 947
Originally Posted by cysyuen View Post
Is it even legal to set up a small business, getting a payment service that takes card payments then pay your business by your Amex card and withdraw the money to the bank account in order to pay your credit card bill?

How would you like some possible criminal charges on top of the civil ones? Also Amex merchant costs are a fortune. Tell em how paying 3% or more in merchant fees is worth it for points. You see threads like this over and over.
robertw477 is offline  

Thread Tools
Search this Thread
Search Engine: