Corporate AmEx Leaves You On The Hook

Paul's company recently decided to use a corporate account with American Express. Paul can't see a benefit to this for him, and he's worried he'll be responsible if the company goes under.

QUESTION: Paul in Chicago uses personal credit cards to pay for business expenses. His company recently decided to move to a corporate account with American Express, and they want access to the account to see his expenses. They’ll reimburse him for his charges. Paul can’t see a benefit to this for him, and he’s worried he’ll be responsible if the company goes under.

ANSWER: You’re not off base at all. It happens all the time. When you sign for a corporate American Express card, you are signing personal liability—liability for the account. I would never do that. I think you have a valid concern. I think it’s suicide to do that. Just tell them to keep fronting your expenses back against your card.

You’re signing liability, and I’ve seen them go after the whole account. It’s as if you were a corporate officer or something. I think it’s a scam. I’ve trashed AmEx on it for years. You can pull it up online and read their agreement. It’s in there. If you start reading through the agreement word for word for word, you’ll see it. We pulled it up a couple of years back and went through it and found it in there. It’s what’s posted on their website as their cardmember agreement on a corporate card. It flat out shows you’re liable. It just shows you’re liable on the account. It’s that simple. It doesn’t have to say, “And others.” All it’s got to do is just say you’re liable on the account. There’s no limitation to your personal expenditures. It’s an account. It could be massive. I have seen it several times personally, doing financial counseling over 20 years, where AmEx holds the client responsible—the former employee responsible. I’ve seen them go after them multiple times—not just once or twice. It’s not a rare occasion. It’s a fairly standard deal. I would never have an employee sign an American Express corporate card.

By the way, I would also add to the discussion that if I were in your shoes, I’d get debit cards and do away with credit cards. You can do everything traveling with a debit card that you can do with a credit card except go into debt.

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