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    I need some clarity on this.

    It's legal to mandate your employees use a personal credit card for expenses. I got that.

    But is it legal to force them to apply for a new one? Can the company say "you must apply for and use the new XYZ personal platinum card"?

    Thanks in advance.

  • #2
    There's no law prohibiting it so yes, it is.
    The above answer, whatever it is, assumes that no legally binding and enforceable contract or CBA says otherwise. If it does, then the terms of the contract or CBA apply.


    • #3
      Also, next time please start your own new thread - you added your question to another poster's thread from 2006. Thanks. cbg moved your question into its own thread.
      Too often we underestimate the power of a touch, a smile, a kind word, a listening ear, an honest compliment, or the smallest act of caring, all of which have the potential to turn a life around. Leo Buscaglia

      Live in peace with animals. Animals bring love to our hearts and warmth to our souls.


      • #4
        And, I would add - if you get a card mandated by your company, use it only for business purposes. Use another card for personal expenses. There is no law requiring that, although a company, or a bank, may have the employee sign a statement that they will do this. The reason for this is, quite unfortunately, many people are not able to discipline themselves to live within their means when credit is available. Companies make agreements with credit card companies that result in many employees receiving much higher credit limits than they would receive on their own. And, to make sure we're talking about the same thing, this is a personal card issued to the individual (often with the company name printed on the card); it is NOT a company credit card (for which the company would be paying the bill).

        It all works well until someone gets over his/her head on credit card usage. The worst case I have seen was a person who used his card to the limit to get cash advances to use for gambling. Although he considered himself an expert and was sure he would win, the opposite happened (wasn't his fault, he just got bad cards). The company needed him to make a trip - he couldn't since his card was max'd and he couldn't pay the travel expenses. It ended with him getting fired for not being able to make the trip and for gross insubordination in the ensuing discussions.

        This practice, by the way, started in my industry to free the company of the expense of processing travel advances. As such, credit limits are driven by the business expense needs of the individual, not by the credit worthiness of the individual. We had people with credit limits equal to nearly half their annual income because of international travel requirements. Timely processing of expense reports ensures that the employee has the funds by the time the credit card bill is due.
        Last edited by Scott67; 08-20-2009, 11:04 AM.
        Please post questions on the forum rather than sending me a private message or email. That way others who have similar issues have access to the discussion.


        • #5
          Originally posted by Scott67 View Post
          This practice, by the way, started in my industry to free the company of the expense of processing travel advances.
          Also, the rules on advance handling by IRS changed big time in 1993 when the OBRA law was passed. Since then there have been serious restrictions on the use of advances issued by the employer. Advances turn into taxable wages these days by simple passage of enough time.
          "Reality is that which, when you stop believing in it, doesn't go away".
          Philip K. **** (1928-1982)