Using a Business Credit Card for Personal Use

Business Credit Card

Business credit cards are beneficial for small business owners – primarily because they help with tracking expenses and keeping up with the accounting process. However, you may be tempted to use your business credit card for personal expenses, such as vacation or to pay a utility bill.

Although as a business owner, you certainly have the right to use your business credit card for personal use so long as you are not incorporated, that doesn’t necessarily mean it is a good idea.

Problems with Using a Business Credit Card for Personal Use

Using a business credit card for personal use can lead to a number of accounting problems – especially during tax time. The interest incurred on a business credit card is federally tax deductible as a business expense. However, if all of the purchases on your business card are not business-related, you and your accountant will have to carefully calculate the interest individually for each transaction and document it accordingly.

Likewise, if you decide to make business purchases on your personal credit card, rather than using a dedicated business credit card, you will have a harder time writing off your business interest expenses because they will go unreported to the IRS by your creditor. Furthermore, carrying revolving or recurrent business debts on a personal credit card account can inflict significant damage to your personal credit score.

The better decision is to separate your business and personal finances as best as you can. Try applying for a separate personal credit card that you can use for personal expenses, and keep the business card for business purchases only. As an added benefit, if the IRS recognizes that you are separating your business and personal finances, it will be less likely to classify a small business as a hobby, which could prevent you from claiming your deductions.

To apply for funding for your small business, use the form on the right to begin the application process.

For more information, go to Business Credit Card at

Using a Business Credit Card for Personal Use was last modified: February 17th, 2012 by Amit Kraidman
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