I have four American Express credit cards but I only pay one annual fee so today I'm
going to break down how this helps me streamline my personal and business finances and show
you how you can do the exact same thing.
Alright, let's jump right into it.
What is going on everyone I hope you are all having a fantastic day.
So, I've made a number of videos on different American Express credit cards and a ton of
you have asked how and why I have four American Express gold cards without paying four annual
fees and I actually do this by exploiting a bit of a loophole I discovered that definitely
falls into a gray area.
So I am going to walk you through exactly how do I set this up but I want to be clear
that while American Express does not explicitly say that this is not allowed, I have a feeling
that they wouldn't exactly approve of this but when I set up this credit card system
with American Express I did talk to an actual representative on the phone, explained exactly
what I was trying to do and they did not try to stop me and were actually happy to help
me set this up.
So your experience might be a little different, this whole thing might work a little differently
for different cars because again there's not really a whole lot of information on the Internet
about this and I am solely going off of my experience of having four American Express
gold cards for the price of one.
Alright, I don't want to make you wait any longer the way that I do this is really simple
and that's by using what's called an authorized user.
You're probably familiar with what an authorized user is but essentially this is just an additional
cardholder on your existing credit card account and this is frequently used to maybe add a
child as an authorized user if they need a credit card make purchases or maybe a spouse
or an employee or something like that.
And all this means is you have multiple different credit cards that are all tide back to 1 singular
account and this is definitely not anything special to American Express, pretty much any
major credit card provider is going to allow you to add authorized users however they are
not all created equal and we'll get into that in a second.
Before that, though I know a lot of you were probably also wondering why jump through these
loopholes and set up an authorized user rather than just getting a separate credit card?
Well, typically this is because if you're adding your child for example then they are
not able to open a credit card on their own or maybe you want your employee to be able
to make purchases on a business card without you having to constantly pay them back for
those purchases.
But in my case, I use this authorized user feature because I am really cheap... let me
explain.
As I've talked about many times before I run this YouTube channel as a business and as
a result it is super important that I keep my personal and business finances separate
from each other.
This channel is registered as magnified money LLC meaning I could take my EIN also known
as an employer identification number which is basically a Social Security number for
a business and use that to apply for a business credit card.
And it's probably something I will do in the future just to even further separate my business
and personal finances but what I actually have set up right now is I've made magnified
money LLC an authorized user on my personal American Express account.
Again I want to say that this definitely falls into a gray area but the person who help me
add magnified money LLC as an authorized user admitted to me on the phone that that is a
great idea and they never thought of that before so I guess it's a don't ask don't tell
kind of thing.
But the reason that I do this specifically with my American Express gold card is the
Amex gold is $250 per year and actually, the business version of this card is $295 per
year meaning if I wanted to have a personal American Express gold card and a business
American Express gold card I'd be looking at nearly $600 per year which to me is just
not worth it but the great thing about specifically the gold card is that they charge you nothing
to add an authorized user which makes it the perfect product to pull off a setup like this.
For example, if you wanted to add an authorized user to the American Express platinum card
you’d be looking at $175 per year for each additional user on top of the already $695
per year that that particular product currently costs.
Now obviously by doing this you are going to miss out on any kind of signup bonus that
you would get from getting an entirely separate credit card and in my case specifically, the
personal gold card and business gold card do have slightly different benefits but for
the most part, I'd be double-dipping which again is completely pointless.
So before you try to pull off something like this definitely check first of all the difference
between the personal and business version of whatever card you were looking at getting
and then make sure that that particular card does not charge some ridiculous fee for adding
an authorized user since the point of doing this at least in my case is to save myself
from having to pay another annual fee for what is basically the exact same credit card.
One last thing I want to answer before we get into exactly how to set this up, I'm not
sure how this works with other credit card companies but I will say with American Express
specifically, they do a wonderful job of separating your personal and business expenses even though
all of these cards are tied to the exact same account.
So I have shown this in previous videos but if you happen to the American Express app
you can see that it automatically separates my personal expenses from my magnified money
LLC expenses and what I do from here is I have both my personal SoFi checking account
as well as my Novo business banking account linked to my American Express app and once
charges are posted I pay off the business charges with my Novo account the personal
charges with my SoFi account and that way everything is clean and separated and I don't
have to go through statements and figure out what was business or personal…American Express
does all of that for you and all you have to do is make sure that you're making those
payments out of the appropriate accounts.
Alright so how do you set this up?
Well like I said I've found that this works the best and you get the biggest benefit by
doing this with specifically the American Express gold card so if you do want to sign
up and get a pretty hefty signup bonus then I will leave a link for that down in the description
below but regardless of what credit card you're looking at getting whether that's an American
Express card or something entirely different, obviously the first thing you want to do is
sign up for the regular personal version as you would with getting any new credit card.
Then once you've done that and your application is approved you will now want to add an authorized
user whether that be a spouse, child, or as we're talking about in today's video, your
small business.
Now I want to be clear that a small business does not mean that you have to be registered
as an LLC or an S Corp or anything like that.
If you just have a side hustle that you run as a sole proprietorship then when you add
an authorized user to this card and they ask for a Social Security number or an EIN number
all you have to do is put in your own Social Security number because you are the sole owner
of that business.
In fact even though I am registered as Magnified Money LLC, this is still a single-member LLC,
therefore, I did not put in my E IN number and instead, I just put in my own Social Security
number in order to get the magnified money version of this card.
I hope that made sense but let's walk through the process to show you how this works.
So once you get your American Express card, you’ll want to log in to the American Express
site, select account services at the top of the screen, and then click manage additional
cardmembers in the bottom left-hand corner.
From this menu you're able to see any additional cardmembers that you already have so again
in this case you can see that I have magnified money LLC but if you do not yet have any authorized
users or you'd like to add another one you're going to click this large blue button in the
top right-hand corner that says add someone to account.
Then from here, it's pretty self-explanatory you're just going to input that individual's
information including their Social Security number, and then click agree and submit at
the bottom of the screen.
Now a few things that I do want to point out.
Number one all authorized users do have to be at least 13 years old so that is something
you want to keep in mind and number two in the context of today’s video at least, you
can see that you are not able to put in any kind of EIN again because I have a feeling
that American Express wouldn't exactly be a fan of this particular setup.
So even though it is optional what I did is I put in my Social Security number as I described
earlier and under name, I just put magnified money LLC and literally within a matter of
minutes I received an email saying that my new card was on the way and once it arrived
I simply activated it and now I use that card for business expenses and the standard gold
card for my personal expenses.
And as some of you have pointed out previously who pay really close attention, I actually
have my personal card in the standard gold color and the magnified money card in the
Rose gold color which I think looks really cool and this is just a quick and easy way
for me to make sure I don't get the cards mixed up to again ensure that I'm keeping
everything clean and separate.
And the reason I have four gold cards is just that they sent me a rose gold version for
both my personal and magnified money card so two of these aren't even activated and
I just use them as props but you could add multiple authorized users for multiple small
businesses or whatever you need them for.
The last thing I do want to mention is that obviously since you're not putting in an EIN
for your business you are not going to be building business credit.
Not a big deal in my case but if you are a larger business who maybe needs to apply for
a loan or something like that then this might be something worth considering but I did just
want to make you aware that you are not going to build a business credit using this method
so if that's something that you need to do then you will definitely want to just get
a separate business credit card.
So I get that this setup is a little bit unconventional and I'm sure that some of you probably have
opinions about this so I'd love to hear what you think down in the comment section below
and whether or not you think this is a good idea or a horrible idea and why.
Again it's not really something that is widely talked about and for sure falls into a grey
area so while it does work for me at least, for the time being, I'd love to know your
thoughts on it as well.
As always if you did get value out of this content and you want to help support me the
easiest way to do that is actually by checking out some of my favorite financial tools down
in the description below including one offer from the point cash back debit card that will
currently give you $100 when you sign up and make your first purchase so be sure to check
that out using the link down below.
Be sure to hit the like button and subscribe to the channel for more content like this
in the future and of course, thank you so much for your time I really do appreciate
it so much take it easy and I'll see you in the next one!