Financial Russian Roulette

Dustin's wife travels for work one week per month and charges her expenses to a personal credit card for reimbursement later. Should they continue using the credit card or go with a debit card?

QUESTION: Dustin and his wife are debt-free except their house. She travels one week per month and charges her expenses to a personal credit card for reimbursement later. Dustin wants to open a checking account with a debit card just for these expenses. Should they continue using the credit card or go with a debit card?

ANSWER: That’s the proper thing to do that you’re suggesting, and the problem is this: If her company ever goes broke, she’s got credit card debt.

I had a counseling client come in once. This particular guy was working for a company, and he was running up stuff on his AmEx and they were reimbursing him once a month and he’d pay off his AmEx, so it was no big deal, right? He did a Europe trip for them, and they asked him while he was there to pick up some computer equipment. The trip and the computer equipment all totaled about $22,000. When he came home from his Europe trip with the computer stuff in the car, he went up to the front door of his office and it was locked with a padlock on it. The IRS had shut them down. They went into bankruptcy. He never got his $22,000 from his company.

AmEx doesn’t care. They want their $22,000 from him because it’s on his AmEx card. That’s the game your wife is playing. It’s called financial Russian roulette. I’m not putting company expenses on my personal card, counting on the stability of the company.