Provided an employer is financially solid enough to make the payments, and processes expense reimbursements quickly, there’s few things better than being able to charge business expenses to your personal credit card. This makes it easy to earn initial card bonuses, as well as threshold bonuses that might help you keep elite status, and ultimately generates lots of points for you to use later. Imagine being able to charge plenty of airline tickets (at 5x) and conferences at hotels (3x) in large volumes!
But there are several big “if’s”
- There’s risk that the employer isn’t actually solvent, and by the time you route your reimbursement they won’t have the cash
- There’s risk that the reimbursement isn’t processed quickly, and you’ll either need to cover the credit card bill with your own money, or pay interest
- There’s risk that the charge won’t be approved
It’s important to understand how your employer works with reimbursements, and that it has the cash to cover, and it’s important to know with certainty that an expense will be approved before making it.
Diners Club used to offer “60 days to pay” and this was an employee’s best friend. You didn’t have so much to worry about with timeliness of reimbursements, and could probably even wind up making money off the float. I used to just deposit reimbursements into by BankDirect checking account, which would earn American Airlines miles while I waited for the credit card bill to come due. (Of course having big bills on a card can reduce your credit score through higher card utilization.)
An employee at a startup who is expected to put business expenses on a personal card and take reimbursement (at a successful company that processes reimbursements quickly) writes in to The Washington Post to complain. I don’t think doing this should be mandatory, and anyone in a position to do it who can satisfy the risk conditions should be happy if only with a 2% cash back card.
The author calls this white privilege, having a credit score and liquidity to handle business expenses on a personal card.
I’m a Black man with not the greatest credit score, living on a tight budget, and although my boss is an ally who tries to drive diversity and inclusion, it feels like a “White privilege” issue that he assumes I somehow have liquidity to cover these purchases.
It’s available credit more than liquidity that is at issue here. And that’s not always tied to income, let alone race or class. Issues of race aside, an employee may not be able to manage expensing business purchases. And some people aren’t good at managing money, either setting aside the reimbursement money so it’s only used to pay off the credit card rather than dipping into the cash for personal purchases (so that you spend more than you otherwise would, seeing the reimbursed money in your account).