Ask HN: What credit card does your US startup use?
More context:
- very small team (< 5 people)
- mostly used for online services (e.g., servers, SaaS, api ...)
- rarely travel
- in San Francisco
- very small team (< 5 people)
- mostly used for online services (e.g., servers, SaaS, api ...)
- rarely travel
- in San Francisco
From being at startups where people tend to move fast and often move on, tell your staff that they can use the services they need BUT you will only reimburse them for 3 months. After that, it must be on the corp card.
I've seen too many times where AWS, Mailchimp, etc, etc are on someone's personal card and once they leave, everything blows up after a couple months. It's even worse if they left under bad terms.
Give them some flexibility but make sure it comes to a single point of control.
In the past, I've worked at a company where each team managed their own expenses. This led to situations like one team using a certain transaction email provider, and another team using a different one, rather than saving thousands of dollars by going entirely with one or the other. Costs should be managed at a corporate level, not at the level of the individual employee who is tasked with setting up transactional emails.
In the short-term, get shit done world, sometimes things are messier and the edges are rougher and you need to allow for some of that.
My 3 month rule is good enough to evaluate, try it out, play with some ideas, get some feedback, and then scale or kill. If you kill it, expense it and you're done. If you scale it (aka operationalize it), move it to the corp account.
At Twilio, I saw this from both sides.. both as a purchaser and as an evangelist getting people to use our API.
But even in reality I would be worried about a management team that doesn't pay attention to control of a company's technical infrastructure. Having business expenses fall neatly under one bank account is not a complicated responsibility and doesn't get in the way of a "get shit done" attitude.
Totally agree. No reason to ever put something on an employee's personal card... way too many things could go wrong in that situation. Some examples I've seen over the years...
* Employee doesn't document the service... so like all of a sudden your Zapier / IFTTT / Unito / etc. account that was responsible for forwarding various emails to the right people just stops working because an employee left the company. You had no idea how they set it up, and without them you're stuck trying to re-build what they had done. You're boned if you don't make time to document how services work, and audit how they are paid for.
* Employee changes CC (less of an issue now since many recurring charges get updates to CC numbers) and doesn't realize they forgot to update the service... then a mission critical service fails. This happened to one of my clients back when Costco changed from Amex to Visa... the auto-update didn't work across card carriers, and the employee had all the emails from that service provider going into his spam folder... and presto our project management software stopped working for a day. A stitch in time saves nine... Make time to use the company card.
* Employee with the payment card can often call customer support and gain owner-level privileges, even assuming they didn't start with them. If others on the team don't realize this... it can cause drama. Saw this happen a few times with Slack accounts at various companies. One employee started a company Slack... to try it out... ended up getting the free credits they used to (maybe still do) offer, upgrading to paid account... and then being a super admin. We had to go to the employee and get them to transfer account ownership to a company official so they couldn't just change the CEO's email to their own, reset the password, and get access to conversations they shouldn't have access to. Again... this all takes A LOT more time than just using the company card.
* Employee leaves the company, loses access to email address, can't cancel the account that has the CC... gets stuck with a huge bill they can't cancel without canceling their CC. Was an easy fix, but just an awkward situation -- nobody had been using the service since the employee left, and since his card was on auto-pay he didn't notice the $150 / month charge for over a year. At that point his email address was long gone, we had to re-create it, reset the password, get customer support to cancel the account... total waste of a day for someone. We reimbursed the employee, but we had no way of getting a refund from the service provider.
* Employee maxes out credit. Put AWS on your personal CC... have a swing month... boom you max out the credit card the employee had... who knows what other debt he was carrying, or what his limit was... or what the fraud triggers are on some no-name credit union card... it's a huge risk to leave this sort of thing up to your employee... some services will give you notice (again, that requires you having the emails go to the right people), but some will just cut you off. Huge risk to your company introducing this many unknowns.
Final reason... because of perks an employee gets for using their personal card. This simply isn't fair to other employees... these rewards are a form of compensation... you don't want to have a policy that allows people benefits for not using the company card as that's a conflict of interest. Having a policy that requires people to get the service approved, documented, and on the company card will always save you time. "Slow is smooth and smooth is fast..." etc. Even for startups, letting people use personal cards is a horrible horrible idea. Take 10 minutes... do it right.
Though it is needless to say, also make sure you have a vendor email address to manage vendors. We have had vendor account signed up using work email but after the person left the company, we lose the account control and have to ping account manager. Sometimes, that process can take days to complete.
That way you won't miss sales queries, service notifications, or other stuff they used their email for. Update the accounts as necessary and it slows to a trickle quickly.
+1 to a vendors@ or similar email account.
There are a lot of people at my work who use their personal gmail for everything.
OP stated "work email" and advised use of vendor@ email which is what I was objecting to. Everywhere I've been, using vendor@ emails has been a pain and employee emails a non-issue.
Add: It seems to me an extremely remote possibility and trivially resolved.
Using a personal credit card of an employee sounds like an absolute nightmare. I know startups are strapped for cash, but damn.
"I need this tool to solve this problem right now. I can either go bug someone for the credit card and get off track or pull out my own card, get onto putting out the next fire, and settle the cash later."
And as I noted, it's not a long term thing.. it's to allow experimentation in the moment.
Fidelity has a 2% one as well that deposits cash into a fidelity investment account vs CapOne where you have to apply points to other transactions to utilize the full 2% back (and CapOne redemption only applies to certain Merchant Category Codes... FYI Timeshare/Rental in Orlando for a week is not redeemable by CapOne and is not the same MCC as a Hotel)
Active, retired and honorably separated officers and enlisted personnel of the U.S. military.
Officer candidates in commissioning programs (Academy, ROTC, OCS/OTS).
Adult children of USAA members who have or had a USAA auto or property insurance policy.1
Widows and widowers of USAA members who have or had a USAA auto or property insurance policy.
USAA is currently market testing a 2.5% CB card in some states - http://www.doctorofcredit.com/usaa-limitless-credit-card-rev...
Personal, non-business card, military and family only.
http://www.doctorofcredit.com/usaa-limitless-credit-card-rev...
from that doctorofcredit.com URL:
"This card would be your best option for non-category spend (apart from the Discover it Miles, that offers 3% cash back for the first year). Obviously this is a loss leader for USAA, but they would be trying to make that money back on the checking account that requires the $1,000 direct deposit. Most other financial institutions have used bank account bonuses instead, but Fidelity also loses money on their 2% card but still come out ahead as cardholders have larger Fidelity deposits than non-cardholders. I suspect USAA will need to add some limits to this card to make it sustainable, but the limited membership might make this unnecessary."
The Limitless card is pretty much a market test at this point and not an established product.
Point is, make sure you read the fine print before you apply - joint liability may not be standard on all cards. Our bank issued us their business Visa with a very generous line and it is only connected to our business account with no joint personal liability.
As an employee using the company card you would not have personal liability.
Be careful with company credit cards, even if you're only an employee!
Points can be transferred to airline partners for super cheap international first and business class tickets (10¢ per point of value, often), or can be redeem at 1.5¢ per point for any cash flights or hotel rooms on their travel portal. Worst case, 1¢ per point as cashback.
Amex also has quite a few great business card. The Business Rewards Gold, The Business Platinum, and the Business Starwood SPG cards are the best.
For procedures: - everyone should have a company card in their own name. This means you don't wonder who placed that order for 55 gal of lube on Amazon; it will clearly be John Doe or Jane Smith. Since it's a company card, you'll get the bill and will be able to manage recurring purchases (e.g AWS) after the employee leaves. On the other hand if they accidentally order a bridesmaid's dress on the company card (happened at one of my companies) you can make sure the employee is on the hook for it. - no expenses reimbursed -- only company card to be used.
SVB does this very well -- the employees get individual bills a day or two before the company consolidated bill arrives (all sent to the company -- again so the employee has a chance to catch that bridesmaid dress before the boss sees it).
I got it when I was doing a lot of affiliate marketing (no rebills, I swear), which is sort of like being a founder, and spending $xx,xxx a month on traffic. Getting 2% of that back was actually pretty sweet, considering my margins were 15-20% in general.
The third version is spark classic - 1% CB, no AF. I guess that's the version you get if your credit isn't good enough.
Don't see Platinum. Does Platinum have a limit on 3%?
The Chase card? You can redeem the points as statement credit.
If fraud hits your debit card, your cash account is empty and things like rent may be getting returned while you deal with it. With a credit card, that's the credit card company's money so they move faster.
I'd say your two best bets would be either the Chase Ink Preferred or Amex Business Rewards Gold. Both offer 3 points per dollar spent in some categories. The Amex card explicitly lists cloud computing, the Chase card includes internet and online advertising. I'd recommend doing a bit of research to make sure your spending fits into the bonus categories.
If you're redeeming the points for statement credit you'll get 1 cent per point from Chase and .6 cents per point from Amex. There are other ways to redeem points that may be more valuable to you but this should be the minimum value you get.
Both cards have annual fees so you should definitely do the math to see if you'll at least break even on the fee. If you won't break even or you don't use the spending categories that have bonuses you might prefer something simpler. Citi offers cash back cards for businesses that give 1.5% or 2% cash back on all purchases. The 2% comes with an annual fee so once again you'd need to do the math to figure out which one is right for you.
Very friendly service, good online system (not as great as Amex though), $15K limit from day one for a new business with zero revenue at the time. Best of all, 2% cash back on every single purchase (no categories), which adds up to real money when you put all of your expenses like AWS on it.
1. Reporting on who spent how much on what?
2. Access control and roll over in case someone leaves, joins, quits angrily and so on
3. Backup and contingency plans in case your bank decides to revoke their relationship.
4. Points back.
I think Amex has the most finely grained reporting and control and this, alone, is worth more than the others.
For your particular situation I would probably just open a credit card account with whoever your startup banks with. Beyond that I would probably explore do the following (in rough order depending on your company size):
1. Using Personal Guarantee: If you are an early startup you probably cant get easily get a business card without a personal guarantee. In this case its really up to the founding team's credit worthiness and I would recommend Amex/OPEN, Capital One Spark, and Chase Ink. All of these will probably require a personal guarantee to start but these particular ones won't go on your personal credit report (Some other cards may).
2. Establishing Credit: Create a Dunn and Bradstreet account, update it, and make sure you have a good web presence. The easiest business credit accounts to establish are UPS, Fedex, Amazon, Staples/OfficeMax/Depot, Frys, Uline. Open them and pay your bills on time (and in full). This will all boost your D&B Paydex score even if you are only making small purchases from each.
3. Utilize your Bank: In SF Wells Fargo is actually quite good for a small startup, SVB is good once you have funding, and US Bank/First Republic are good alternatives. This is your best bet for first major business line of credit (LOC). A business LOC is almost like a credit card and could even have better terms for repayment. If and how you should actually use it depends on your company and your finances, however if you get one without a personal guarantee they will probably limit your expenses to business expenses.
4. Get Credit without PGs(personal guarantees): Once you are seasoned for around 3-9 months you can start looking to getting credit without a personal guarantee. Beyond your bank I would look at US Bank, Amazon, Amex Business, Cap One Spark. If by that time you have funding and more substantial bank deposits approval will be much easier.
It offers a 3% cash back off all purchases during your first year and the annual fee ($59) is waived during the first year. 2.5% cash back after the first year.
Source: http://www.doctorofcredit.com/alliant-cashback-visa-signatur...
The gold business card gives 3X points on Facebook/google ads, while the business platinum gives 1.5x points on purchases over $5k (useful for equipment purchases). You also get 50% points back on preferred airline travel bought with points directly through amex.com
I do realize that not everyone has credit sufficient to get these two, but if accessible they are great.
Aside from the 2-5% return by using these cards, (and warranty, travel, etc. benefits), I find amex billing statements the easiest to reconcile across multiple purchasers.
In fact, even as a non-executive I'd have no problem putting SaaS on my points earning personal card if I trusted that my expenses would be reimbursed in a timely manner.
I've gotten multiple free flights and hotel rooms this way.
I might get down voted a bit because people could argue that the company should reap the rewards from any points but I don't personally see an issue with it.
I have a reminder setup to request a statement credit at the end of each month and it hits our P&L as income.
Something else to be aware of is that some business cards will hit your personal credit score. The Capital One Spark card I have does, but the Citi AAdvantage card I had previously doesn't.
I pay in full every month so it actually improved my credit score a few points as it added $30K in available credit with 0% utilization, but if you are going to carry a balance you could take a hit on your personal credit score - especially if your available credit utilization is high.
A less snarky answer is to join Credit Karma and see what they recommend. It's a great service for $0.
"on advertising purchases made with social media sites and search engines each account anniversary year"
We have the no annual fee version (Business Cash rather than Business Preferred).
do you only get points once a year? 25k doesnt seem that high for 2% back limit especially for a business?