Can I use a personal card for business expenses?

It’s permissible to use a personal credit card for business expenses. Although plenty of cards are created specifically for small businesses, personal credit cards are often used instead.

Seventy-six percent of small business owners regularly used personal credit cards for their business expenses, according to a 2022 report from Mastercard on small business banking. Of those 76 percent of people, 53 percent used both business credit cards and personal credit cards, while 23 percent used only personal cards. Meanwhile, only 10 percent of small business owners used just business credit cards.

So why, as an entrepreneur, would you use a personal card rather than a business credit card? Here are the top situations you’d likely be better off using your personal credit card for business expenses and when you’d likely be better off getting a business credit card.

When to use your personal credit card for business expenses

You may find that a personal credit card is your best — or only — option for your small business expenses. This is often the case when the following situations arise:

• You can only qualify for a personal card

  Most business credit cards require applicants to have good to excellent credit scores. If you’re new to credit or if you have a bad credit score but need a credit card for business purposes, you can use a personal credit card as a stepping stone. A personal card is easier to get and can help you establish credit, which will ease your way into qualifying for a business credit card.

  There are plenty of credit cards for those with bad credit or little to no credit history, such as secured credit cards. The credit lines for these types of cards generally start small, but after you manage the account responsibly, you can request a credit limit increase. After you’ve built or repaired your credit, you can choose a business card that suits your needs — if you decide that you need one, of course.

• Your business is a temporary or sporadic side hustle

  While you can use a business credit card without your business being a full-time pursuit, you might not benefit much from doing so, especially if your venture is something more casual. For example, maybe you walk the dogs in your neighborhood after your full-time job to earn a little extra cash, or maybe you do freelance photography as a side hustle. Yes, you’re running your own operation that has expenses, but you likely don’t need to take out an extra line of credit to fund it.

  If you have a couple of personal rewards cards already, choose the one that has the greatest cash back, miles or points earning potential for the expenses associated with your business. As long as you pay the bill in full by the due date, you’ll come out ahead with the rewards.

• You want to streamline your credit management

  The last thing small-business owners want is to spend time on unnecessary tasks. This may be reason enough to lean into the credit cards you opened for your personal life. That’s what Vanessa Gordon, publisher of East End Taste Magazine in East Hampton, New York, decided to do.

  “A business credit card will be just another card to keep track of,” says Gordon, who keeps track of her costs by printing out the account statements, then identifies which are business and which are personal. “I’m looking at screens more often than I want, so printing and highlighting helps me to compare different spending. I just find it easier to use my personal cards.”

  Since her magazine has her globe-trotting, Gordon uses the Emirates Skywards Rewards World Elite Mastercard®* and the Citi / AAdvantage® Executive World Elite Mastercard®. Both are rich with travel perks, including access to some of the world’s best airport lounges. The rewards are ideal for her business, too. She charges a variety of expenses to her cards, including:

  • Flights
  • Gas
  • Food
  • Accessories for photo shoots
  • Photographers
  • Videographers
  • Event planners

  By paying the balance off each month, she gets to take advantage of her card perks while also keeping her personal credit score safe.

• You may get similar perks for a lower annual fee

  When searching for a credit card that offers rewards and benefits for your business, check out the annual fee and the benefits. As long as you get more out of the card than it costs, that fee can be worth it. However, if a personal credit card has great perks at a lower cost than the business card option, you may want to take that instead.

  As an example, let’s compare the American Express® Business Gold Card and the American Express® Gold Card:

  Card details	**American Express® Business Gold Card	American Express® Gold Card
  Welcome offer	Earn 100,000 Membership Rewards® points after you spend $15,000 on eligible purchases with the Business Gold Card within the first 3 months of Card Membership.*	You may be eligible for as high as 100,000 Membership Rewards® Points after spending $6,000 in eligible purchases on your new Card in your first 6 months of Membership. Welcome offers vary and you may not be eligible for an offer.
  Annual fee	$375	$325
  Rewards rates	Earn 4X Membership Rewards® points on the top two eligible categories where your business spends the most each month from 6 eligible categories. While your top 2 categories may change, you will earn 4X points on the first $150,000 in combined purchases from these categories each calendar year (then 1X thereafter). Only the top 2 categories each billing cycle will count towards the $150,000 cap.* Earn 3X Membership Rewards® points on flights and prepaid hotels booked on amextravel.com using your Business Gold Card.* 1X is earned for other purchases. **	Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year. Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year. Earn 3X Membership Rewards® points per dollar spent on flights booked directly with airlines or on AmexTravel.com. Earn 2X Membership Rewards® points per dollar spent on prepaid hotels and other eligible purchases booked on AmexTravel.com. Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases.

  While the Amex Business Gold offers a larger welcome bonus than the Amex Gold, that bonus comes with a much higher minimum spending threshold and a shorter amount of time to reach it. It also comes with a higher annual fee. If your business isn’t spending enough per month to take advantage of the higher rewards rate caps or justify the annual fee, then you might be better off with the personal consumer version of the Amex Gold instead.

• You may be able to avoid financing fees for a longer time

  Both business credit cards and personal credit cards can come with an annual percentage rate (APR) offer, which gives you the ability to charge expenses and carry a balance over for a fixed time period without interest being added.

  When you’re making large purchases for your business, such as for new equipment or software, avoiding interest for a set period of time can help you save. Many of the best 0 percent introductory APR deals are for personal credit cards, making them appealing to small business owners trying to save money.

  That’s what Kim Hawkins did. Hawkins is president of EventsWholesale.com, a discount event and wedding planning supply company based in Watkinsville, Georgia. Her company recently started manufacturing commercial-grade plastic columns and colonnades in house — an especially expensive endeavor.

  To get what she needed, she opened a Chase Freedom Unlimited® card, which gave her an introductory APR on purchases.

  “This … allowed us to purchase almost $100,000 worth of columns on the card and pay everything off the following year, after we started bringing in more revenue …” says Hawkins. “On top of that, we received a cash back bonus, and points that we can use towards travel for future conferences and trade shows!”

• You may get stronger legal protections

  Another reason a business owner may choose a personal card over a business card is legal protection. The Credit CARD Act of 2009, a powerful consumer protection law, doesn’t apply to most small-business credit cards. This law assures cardholders that the issuer can’t raise the account’s APR without cause or fair warning.

  Some business credit cards may offer the same or similar consumer protections as those guaranteed for personal cards, but not all do. If you can’t get a business credit card that voluntarily offers that protection, you could consider a personal account instead.

  Another thing to keep in mind is the vulnerability of your personal credit. Many consumers assume that using a small-business credit card will protect their personal credit score, but that’s usually not the case.

  Most small business credit cards still require cardholders to provide a personal guarantee. This guarantee assures the issuer that if an account goes delinquent, it can pursue the business owner for damages. Not only will it hurt the person’s credit history and scores, but their assets are at risk of liens and levies if the creditor takes the matter to court.

Disadvantages of using a personal credit card for business

While there are a few advantages to using a personal credit card for business, there are still several risks associated with this approach, such as:

• You’re on the hook for liability: When using a personal credit card for business expenses, you are personally liable for any debts incurred. This means that your personal assets could be at risk if the business is unable to repay the credit card balance.
• There could be an impact on your personal credit score: Utilizing a personal credit card for business expenses can impact your personal credit score if the business carries high balances or faces financial difficulties. This may affect your ability to qualify for personal financing or future credit card options.
• Expense tracking becomes complicated: Mixing personal and business expenses on the same credit card can make tracking and categorizing expenses more confusing.
• High potential for tax implications: Using a personal credit card for business expenses can complicate tax filings and deductions during tax season, and affect financial reporting accuracy, as it would be challenging to distinguish between personal and business expenditures.
• You’ll get limited to no business benefits: Personal credit cards often lack the specialized features and benefits tailored to business needs, such as employee cards with customizable spending limits, detailed expense reporting and rewards optimized for business spending.

When to get a business credit card for expenses

You might be better off using a business credit card as opposed to a personal card when the following situations occur:

You want to provide employee credit cards

Business credit cards usually allow you to add employees to your credit card account by giving them each their own employee credit card. The best business credit cards also allow you to track individual employee spending and set spending limits on each card.

You want to make the most of your personal credit profile

If you can qualify for a business credit card, it could help you start building your business credit, but it can also help you better optimize your personal credit. Most card issuers don’t report your business activity to credit reporting bureaus unless there’s something negative to report. This means you could have a higher credit utilization ratio on a business card, for instance, without that impacting your personal credit score.

You’re looking for rewards geared toward business spending

Rewards on business credit cards are more geared toward business spending, such as on office supplies. Business credit cards also tend to offer a variety of statement credits that could help you with your overall operation. The Business Platinum Card® from American Express, for example, offers statement credits like:

• Up to $200 semi-annually per year on Dell purchases (up to $400 total)
• Up to $90 per quarter on Indeed hiring and recruiting products and services (up to $360 total)
• Up to $200 per year for qualifying airline fees with a selected airline
• Up to $10 per month for telephone service purchases made directly with a U.S. wireless provider (up to $120 total)

Business credit cards tend to offer higher credit limits, too, so you’ll have more spending power to devote to your business.

You want to keep better track of business expenses

As your business grows, it can get difficult to separate your personal spending from your business spending. Having a dedicated business credit card could make keeping track of your business expenses easier, as some business credit cards come with bookkeeping software integration. You’d be able to easily track and categorize not only your own spending but also the spending of any employees with their own cards.

How to manage a personal card for business expenses

Just like it’s not illegal to use a business card for personal costs, there is no law that says you can’t use a personal credit card for your business. Once you have a personal card, be sure to use it appropriately for your business. The rules are simple:

• Pay on time and keep revolving debt low. These are the two most important factors when it comes to your credit score.
• Maximize your rewards. From earning a welcome bonus to earning points, miles or cash back, you can find plenty of ways to earn rewards with a personal credit card. Just pay your bill on time due date every month.
• Separate and track your business expenses. If you’ll be using your card for both business and personal expenses, review your statements every month. You’ll need to know how much your business is spending so you can project for the future and plan for taxes.

The bottom line

You can absolutely use your personal credit card for business expenses, and many small business owners already do. If your business is still pretty new, if you can’t qualify for a business credit card, or if your business isn’t a full-time pursuit, you’re likely better off using a personal credit card for now.

*The information about the Emirates Skywards Rewards World Elite Mastercard® has been collected independently by Bankrate. The card details have not been reviewed or approved by the card issuer.