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How not to earn rewards

By Janna Herron ·
Monday, December 12, 2011
Posted: 4 pm ET

From sunny Los Angeles comes a cautionary tale about the wrong way to earn credit card rewards points.

The finance director of the Los Angeles Memorial Coliseum was in charge of upgrading the sound system for the video board at the taxpayer-owned arena. Instead of paying the $270,000 it would cost to buy the equipment with a government check, he put in on his personal Chase Visa card instead, according to a Los Angeles Times report.

He paid off the balance using several government checks that he and his employees signed. During that time, he racked up enough rewards points for a week at the downtown Ritz-Carlton, two Bulova watches or a first-class round-trip on United Airlines to London or Tokyo, according to the report.

There is no record the finance director ever redeemed his rewards points, but he said he used the points to travel to conferences on Coliseum business. He was unable to provide proof of that claim.

The director also said the reason he put the equipment on his Chase Visa card was to get the extended warranty of one year. While many credit cards offer extended warranties (check out my recent article on who does), there are limits and restrictions. Many don't cover equipment purchased for commercial use.

The report also said this wasn't the first time the finance director put major Coliseum expenses on his personal credit card. He also charged $21,000 for flooring and $14,000 for fencing material, among other expenses.

The report didn't say the finance director is under investigation for any possible breach of duty, although several government officials are screaming foul.

Avoiding trouble

Regardless of whether you have a corporate card or not, it's a good idea to get employer approval before putting business expenses on a personal credit card. Ask your boss and follow up with the human resources department.

The other danger is you may not get reimbursed quickly enough before your credit card payment is due. So forget the rewards points -- you may find yourself paying a boatload of interest on purchases that aren't yours. That's not the kind of business perk you're looking for.

Do you ever mix business purchases with personal credit cards?

Follow me on Twitter: @JannaHerron.

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