My Square Account Got My American Express Card Cancelled. – Chris

“Dear Steve,

I live in Virginia. Yesterday I received a call from AMEX Financial Review office because they state I had been using my square device to “lend me some monies” from all 3 cards and this is a NO-NO. I did not know I explained but said nothing else. They want me to have my bank send them my last 6 months average balance up to 2 accounts.

Actually they wanted me to call my banks and had them talk to them to which I declined and told them to send me the form and I would get to them. They said I had 8 days to act upon this.

I have never been late on any payments to them ever, always been on time. I do have like $25K in all three cards in debt with them, but this has been a rough year business wise.

The truth is that I was using the “loans” to help me pay “on-time” since my clients are dragging their feet paying me. I have a AMEX business and two regular accounts only on my name.

I have a business account which won’t say much only the square and little of other deposits. I have a third bank account on my name only but they told me I can only sent two.

I have a joint bank account with my husband but am afraid that they may want to freeze my AMEX accounts for good and then freeze our joint account monies.

How can I protect that joint account and how can I fight this back. I have been a good client as they have been a great credit company to me.

I am expanding also to Latin America and have another business bank account there.

Please guide me. I don’t want my husband to suffer for my foolishness and ignorance. I don’t want to ruin my credit either and I can enter into any arrangement with them but really I need to protect us now.


Dear Chris,

If we distill this down to the lowest common denominator the accounts and cards are the property of American Express and if they want to take their card and go home, they can at any time. Building a future based on any one card is like a house of cards, no pun intended.

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As a merchant myself I have seen it in merchant agreements where you can’t charge your card for deposits into your account.

According to Square the merchant account can’t be used for the following:

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By creating a Square Account, you also confirm that you will not accept payments in connection with the following businesses or business activities: (1) any illegal activity, (2) buyers or membership clubs, (3) credit counseling or repair agencies, (4) credit protection or identity theft protection services, (5) direct marketing or subscription offers or services, (6) infomercial sales, (7) internet/mail order/telephone order pharmacies or pharmacy referral services (where fulfillment of medication is performed with an internet or telephone consultation, absent a physical visit with a physician including re-importation of pharmaceuticals from foreign countries), (8) multi-level marketing businesses, (9) inbound or outbound telemarketers, (10) prepaid phone cards or phone services, (11) rebate based businesses, (12) up-sell merchants, (13) bill payment services, (14) betting, including lottery tickets, casino gaming chips, off-track betting, and wagers at races, (15) financial institutions offering manual or automated cash disbursements, (16) financial institutions offering merchandise and services, (17) sales of money-orders or foreign currency by non-financial institutions, (18) wire transfer money orders, (19) high-risk merchants, including telemarketing merchants, (20) service station merchants, (21) automated fuel dispensers, (22) adult entertainment oriented products or services (in any medium, e.g., internet, telephone or printed material), (23) internet/mail order/telephone order firearm or weapon sales, (24) internet/mail order/telephone order cigarette or tobacco sales, (25) drug paraphernalia, (26) occult materials, (27) hate products, (28) escort services, and (29) bankruptcy attorneys. – Source

I did get a kick out of the fact bankruptcy attorneys are listed right after escort services.

I reached out to Square last week for a comment on the situation but they did not respond.

The reality is that I don’t really see this as a Square issue as much as an American Express one. It seems clear that you may have been using the Square device to charge transactions against the AMEX cards, essentially taking cash advances, to then pay the cards and whatever.

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American Express is not going to take kindly to that approach. The logical choices at this point are to:

  • negotiate a solution that you can live with but expect to have your cards closed or limits significantly reduced;
  • pay the cards in full if you are carrying any balance due and be prepared to have the cards reduced or closed; or
  • hire a local attorney to represent you if you are intimidated about dealing with American Express.

If any of this activity did involve the joint card I can see AMEX closing it but as long as their is no financial liability to go after the account for I can’t see your husband being harmed other than his credit will probably reflect the account was closed by the merchant and he’ll lose the benefit of a continued relationship with American Express.

Please post your responses and follow-up messages to me on this in the comments section below.

Damon Day - Pro Debt Coach

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Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
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