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A Guide To Using Personal Credit Cards For Business Expenses

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Jason Vissers

Jason Vissers

Jason Vissers is a writer and cereal chef from San Diego. He graduated with a Political Science degree from San Diego State University in 2001. He's been writing about website builders, crowdfunding sites, online lenders, and credit cards for Merchant Maverick since 2015. Additionally, Jason can't eat raisins.
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22 Comments

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    Page

    This is a great article and it touched on something that I have been struggling with, as I am a frequent purveyor of my credit score. We own our own business and we use a personal credit card to pay for monthly business expenses, both to build credit and reward points. However, some months we have larger than normal expenses by a few hundred dollars. Even though we have paid the balance off every single month before, for years, my credit score takes a slight dip and it’s really frustrating that my payment history isn’t taken into account. Is there a strategy to avoid this? Thank you for your time, Page

      Jessica Dinsmore

      Hi Page,

      Great question! Unfortunately, it’s a bit outside our areas of expertise, but we think this Experian article might be helpful to you. Good luck!

        Ryan Freund

        I had a question I am having a hard time finding an answer to. If I purchased an item (say a printer) for home use that work reimbursed me for (used it mainly for work purposes at home) is it my property still or does the fact that they reimbursed me legally make it the company’s property?

          Jessica Dinsmore

          Hi Ryan!
          This really all just depends on what your company reimbursement policy is.

            ashraf

            Hello There!

            If i use my personal credit card for my business purchase products, and pay back through business account, am i allowed to do that?

              This comment refers to an earlier version of this post and may be outdated.

              Jessica Dinsmore

              Hi Ashraf,

              You could do that, but it’s really best to keep business and pleasure separate, unless you are using a personal card exclusively for business purchases. As mentioned in this post, “If you charge business and personal expenses on the same card, you may have a harder time proving to the IRS that your business charges really were for business purposes.”

                This comment refers to an earlier version of this post and may be outdated.

                Loan Ambriz

                I just open new bussiness in US. I work for my bussiness and i pay for myself. Since i just start to run a bussiness. I dont know and need to learn a lots
                So how can i pay for myself? Check or direct deposit to personal bank card?
                Can i pay my salary from Bussiness Card to Credit Personal Card?
                If i use Personal Credit Cards for expenses of Bussiness Card. Can i pay this Personal Credit Cards by Bussiness Card?
                Thank you so much.

                  This comment refers to an earlier version of this post and may be outdated.

                  Jessica Dinsmore

                  Hi Loan,
                  It sounds like you need to open an online payroll system and set up your business bank account to pay your personal bank account through direct deposit. A simple system like Square Payroll or Intuit Online Payroll would work best! I hope that helps! Good luck with your new business!

                    Steven Hostetter

                    I’ve been using a personal card for my LLC real estate rental business for years. The nick-name on the card is the name of my LLC but the name on the account is obviously me. Recently I’ve been researching ways the “corporate veil” of an LLC can be pierced and I’m concerned about not having my LLC name on the card. My hope is that as long as I only use the card for this business I’m OK but I don’t know. It would seem that every small business using an LLC would have this issue. What do you know? I’m looking for what you know to be common practice, not legal advice so no worries there.

                    Thanks,

                    Steve

                      This comment refers to an earlier version of this post and may be outdated.

                      Emily Hale

                      Hi Steven,

                      You are correct that keeping business and personal expenses well documented and separate is important in record keeping for that “corporate veil” protection you referred to in your question. As far as what’s common practice and how you should approach your card usage, I think this would be best answered by an accountant who understands your needs. We don’t want to offer advice that we may not be qualified to give. Best of luck!

                        This comment refers to an earlier version of this post and may be outdated.

                        Craig Pierce

                        After searching several sites, I have found no mention on whether or not a personal credit card used for both business and personal purchases has an annual fee which can be deducted for tax purposes. While the card is essential for business purchases; it is extremely convenient to also use the card for personal purchases too.

                        Also, if I am carrying a balance, conceptually speaking, shouldn’t I be allowed to deduct some of that interest since it it partially being charged for business purchases?

                          This comment refers to an earlier version of this post and may be outdated.

                          Jessica Dinsmore

                          Hi Craig,

                          While a business credit card’s annual fee is tax deductible, a personal card’s annual fee is not tax-deductible. As for the card’s interest being tax deductible, that would be really complex to do for a personal card that’s being partially used for business because you’d have to calculate the share of the overall interest payments that’s going towards the business purchases. You’d likely need professional help with that!

                            This comment refers to an earlier version of this post and may be outdated.

                            Edward Roy

                            If you put business expenses on your personal card and thereby earn airline or hotel points, or even cashback rewards, on your personal card (but are being reimbursed for these expenses by the business) is the value of those points/rewards considered taxable income/compensation to the employee? I think the answer is No though it might be a loophole in the system. But wanted to make sure.

                              This comment refers to an earlier version of this post and may be outdated.

                              Jessica Dinsmore

                              Hi Edward,

                              This isn’t something we are too familiar with, so we can’t say for sure. However, after running a very brief search, based on our limited search results, it appears that the rewards in this instance would likely not be considered taxable income.

                                This comment refers to an earlier version of this post and may be outdated.

                                Jenn

                                I have a question..
                                Am I to pass those rewards I earn from legitimate business purchases onto the business?
                                For instance:
                                I earn 3% cashback on fuel purchases. Can I keep that 3% for myself & have my company reimburse me to fuel up the company vehicle..or..am I to give that 3% to the business?

                                  This comment refers to an earlier version of this post and may be outdated.

                                  Jessica Dinsmore

                                  Hi Jenn,

                                  This isn’t something we know too much about, but we did a little digging around and found that in your scenario, it appears that you could keep your rewards.

                                    This comment refers to an earlier version of this post and may be outdated.

                                    Page

                                    My dad worked/traveled for business with an accounting software firm for over 20 years. He used various business credit cards to pay for all of his expenses; flights, meals and hotels. Regardless of the card he used, the rewards were his to keep, as were the loyalty points for the hotels and the frequent flier miles. This is an industry perk for employees who foot the bill upfront and wait for company reimbursement each month. His accounting software company is a publicly traded company, Tyler Technologies, so I have full confidence they know the rules.

                                      Jordan

                                      In order to make the monthly payments of my personal card from my business account. Do I need to reimburse myself as an employee through PAYE or can I make the payments directly from my business account to my personal credit card?

                                        This comment refers to an earlier version of this post and may be outdated.

                                        Jessica Dinsmore

                                        Hi Jordan,

                                        This is a bit outside our expertise. I’d recommend consulting a tax professional familiar with how PAYE works in your area, as it appears it is specific to the UK/Australia.

                                          This comment refers to an earlier version of this post and may be outdated.

                                          Mfc

                                          Thanks for sharing. However, it soars another question. Is it ethical for the CEO or BOD of a 501(C)3 to request company bills be paid through his personal credit card specially to earn reward points and the company reimburse his credit card bill? When the company had the funds to pay the bills originally?

                                            This comment refers to an earlier version of this post and may be outdated.

                                            Jessica Dinsmore

                                            Hi Mfc,

                                            This isn’t something we’ve encountered before, so we don’t want to give any advice we aren’t qualified to give. However, after doing some quick research, it seems 501(c)(3) tax-exempt organizations can run into trouble with their tax-exempt status if they operate in this way.

                                              This comment refers to an earlier version of this post and may be outdated.

                                              mdrakib

                                              wow very nice and helpful article,i think this blog is very helpful for everyone and me.
                                              i got many information from here.thanks a lot for sharing this post. good job keep it up.

                                                This comment refers to an earlier version of this post and may be outdated.

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