Can You Use A Business Credit Card For Personal Expenses

According to the irs utilizing a business charge card for individual costs puts all the cash that your business spends through visa into inquiry. Cards like the chase sapphire preferred and the capital one venture will give you a very high limit relative to your income so you won t need to worry about your utilization ratio. Plus given the potential for earning valuable rewards on business credit card purchases it may seem logical to use a business credit card for personal expenses.

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While this seems like a good idea on the surface it probably won t yield the.

Can you use a business credit card for personal expenses. Not only can using your business credit card for business costs streamline your bookkeeping and your tax preparation but it s just solid entrepreneurship practice. Periodically card issuers will also send emails to their customers reminding them that card is exclusively for business use. When you obtain a business credit card you typically have to sign a cardholder agreement in which you agree not to use the business credit card for personal use including family or household expenses. Still the severity of risk depends on your circumstances.

If you want to cover business expenses with your own personal credit card sign up for a card that fits the bill and use it exclusively for business. You may be tempted to use your business credit card for personal purchases to help build up your personal credit score. Amid a review the weight of confirmation is on the entrepreneur to demonstrate the authenticity of all business charge card exchanges. The real disadvantage with using a business card for personal expenses is that it does not have the same protections as a personal card as i discussed in a previous column business card benefits outweigh limitations for most businesses.

It is not illegal to put personal expenses on a business credit card. While there s no evidence this is a widespread occurrence all of the major business credit card issuers say putting personal spending on your business card is a no no and require you to agree to put spending on their business cards for business purposes only. In reality covering personal expenses with a business credit card can seriously impact your business s financial well being. While there can be some advantages when you use a business credit card for personal expenses make sure you weigh them against the downsides.

If you charge a large business purchase to your card your credit utilization ratio will be affected until you get reimbursed. If you use a separate personal credit card for all your business related expenses know that you can negatively impact your personal credit score with your business purchases. But that doesn t necessarily mean you should. Consumer credit cards are subject to the card act which gives consumers significant rights and protections.