Author Topic: Manufactured Spending on a Business Credit Card  (Read 2360 times)

jpdx

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Manufactured Spending on a Business Credit Card
« on: March 25, 2021, 04:25:46 PM »
The Chase Business Ink Cash card is offering a $750 bonus, but you have to spend $7,500 in the first 3 months. I have $6000-6500 of organic business spending ready to go, but I don't know what to do to close the gap.

I am familiar with manufactured spending, but all of those methods seem more appropriate for a personal card instead of a business card. For example, if I buy gift cards as use them for business expenses later on, how do I account for them in my ledger? Can the business pay my spouse their draw through Venmo or PayPal without any issues? My business has a PPP loan if that factors in.

travel2020

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Re: Manufactured Spending on a Business Credit Card
« Reply #1 on: March 25, 2021, 07:26:06 PM »
You can put a personal expense on business card and then reimburse your business for that expense. Iíve accidentally used business card for personal at times and when realized the mistake, I just wrote a check to the business to reimburse the business for the personal expense.

Queen Frugal

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Re: Manufactured Spending on a Business Credit Card
« Reply #2 on: March 25, 2021, 08:05:30 PM »
You can put a personal expense on business card and then reimburse your business for that expense. Iíve accidentally used business card for personal at times and when realized the mistake, I just wrote a check to the business to reimburse the business for the personal expense.

I signed up for that same card. I received an error message so I applied again. And I ended up with two cards! I was stressing about meeting the spend for two cards but alas my dog just had an unexpected emergency surgery today so that'll help!

I don't do manufactured spends. What I do in a pinch is pay my estimated taxes with the credit cards. There are fees associated with this but they are worth paying if you meet the spend and receive the bonus.

Also, I don't treat the business cards any differently than my personal cards.  They all get paid with my personal checking account but then the business reimburses me for the business expenses.

FLBiker

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Re: Manufactured Spending on a Business Credit Card
« Reply #3 on: March 29, 2021, 09:18:41 AM »
I don't remember if I've done this, but I wouldn't hesitate to.  Like others have said, I have routinely bought personal items on business cards to hit spending thresholds, and just reimbursed the business.

therethere

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Re: Manufactured Spending on a Business Credit Card
« Reply #4 on: March 29, 2021, 09:25:54 AM »
Just a warning. Chase is trying to put a stop to manufactured spending. So be careful how you are doing it. This change is going into effect at the end of the month....

    Cash-like transactions will be treated as cash advances. Cash-like transactions include, but are not limited to, the following transactions to the extent they are accepted:

        purchasing travelers checks, foreign currency, money orders, wire transfers, cryptocurrency, other similar digital or virtual currency and other similar transactions;
        purchasing lottery tickets, casino gaming chips, race track wagers, and similar offline and online betting transactions;
        person-to-person money transfers and account-funding transactions that transfer currency; and
        making a payment using a third party service including bill payment transactions not made directly with the merchant or their service provider.

I would think you'd still be good with purchasing gift cards, especially if at a retail store. But Plastiq and tax payment appears to be getting shut down.


jpdx

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Re: Manufactured Spending on a Business Credit Card
« Reply #5 on: March 29, 2021, 11:02:06 AM »
Oh no! Thank you for this heads-up. I was planning on doing an estimated tax payment, then reimbursing the business. The list doesn't explicitly mention tax payments -- which item do you think that falls under?

ď...bill payment transactions not made directly with the merchant or their service provider.Ē

The way I read it, an IRS payment is made directly with an IRS service provider, so should not be treated as a cash advance.

cool7hand

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Re: Manufactured Spending on a Business Credit Card
« Reply #6 on: March 29, 2021, 12:06:28 PM »
You can put a personal expense on business card and then reimburse your business for that expense. Iíve accidentally used business card for personal at times and when realized the mistake, I just wrote a check to the business to reimburse the business for the personal expense.

+1: This is a great solution.

Catbert

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Re: Manufactured Spending on a Business Credit Card
« Reply #7 on: March 31, 2021, 11:12:29 AM »
Oh no! Thank you for this heads-up. I was planning on doing an estimated tax payment, then reimbursing the business. The list doesn't explicitly mention tax payments -- which item do you think that falls under?

ď...bill payment transactions not made directly with the merchant or their service provider.Ē

The way I read it, an IRS payment is made directly with an IRS service provider, so should not be treated as a cash advance.

This has been discussed a lot around the web.  Nobody really know *for sure* exactly what will be counted as a cash advance under this new provision.  General thought is that Platic (sp?) to make a mortgage payment will be a cash advance while PayPal to buy glasses from a Chinese vendor will be ok.  I agree with your logic about the IRS as do many.  But we won't know until someone tries.

This reminds me that I plan to get Chase to lower my cash advance limit to $100 or as low as it goes to that I don't outsmart myself.