Using Your Personal Card for Business? Here’s How to Do It Right

Using Your Personal Card for Business? Here’s How to Do It Right

Everyone has an opinion about whether it’s ok for merchants to use their personal credit card for business expenses. It’s one of the most highly-debated topics in the financial services and adjacent industries––retailers, SMB owners, and accountants all tend to have differing viewpoints. But the truth lies somewhere in the middle: there’s both a right and a wrong way to use your personal card for business expenses… and a couple of different factors play a role in determining which category your transactions fall into. 

Let’s take a look.

Can you use your personal card for business? 

The short answer? Yes, but with a few caveats (that we will talk about in a minute). It’s no surprise why you’d be tempted to use the ole personal card for business-related purchases––especially if you own or work for a SMB. On personal accounts, banks often give you the option to make purchases with little to no annual fee for a period of time. This rarely happens with business accounts. Many banks also offer competitive incentive programs for personal account holders, such as airline miles and/or cashback on purchases. 

There are also different legislations surrounding the use of business and personal cards. The CARD Act of 2009 protects consumers by unfair manipulation by credit card companies––eliminating or mitigating extreme credit card charges, providing stronger regulations around fee disclosure, and using more transparent language in monthly statements. Because personal credit card statements are often easier to decipher, you might opt to use a personal account as you learn the lingo on your financial statements. 

When is it ok to use a personal credit card for business expenses?

When you have a separate, “personal” credit card for your biz expenses than you use for your personal spending. Personal cards generally have lower spending limits, so they work best for smaller purchases. Be sure that, if you’re using your personal card to cover expenses for a business that employs you, you’re getting reimbursed before you get any interest fees (or take a hit to your credit score) as the result of the reimbursement waiting period. 

Is it recommended to do it? 

Depends on the situation. Using a personal credit card for business can be a strategic move to maintain revenue when you do it because a bank has an offer like no APR for the first year or offers competitive rewards on business purchases. But if you’re using the same card you use for your personal expenses simply because you don’t feel like going to the bank and opening a new account for your business? Not so good. 

Keep in mind that personal credit accounts can also be shut down when they are inactive for a period of time. So, you’ll want to ensure you’re making regular purchases if you opt to use a personal card for your business expenses. 

Are there situations when it’s NOT ok to use your personal credit card?

Absolutely! Certain hotels and car rental companies will freeze funds in your personal account for a period of time while they verify additional expenses, so you want to be sure you have about $500 dollars allotted to your personal (business) credit card for these temporary expenses as they arise. You don’t want money you need for living expenses to be tied up in business holds. 

Additionally, certain companies dole out credit cards specifically for business expenses. If you work for one of these companies, you can’t just put expenses on your personal account because you want the airline miles. Work within the expense/reimbursement structure provided by your employer. But, with that said, ensure your employer is reimbursing you for expenses in a timely fashion so that your personal credit core is not impacted. 

Using your personal card for business expenses may also complicate your tax/accounting processes if you don’t use a separate card for your personal and business expenses. It’s fine to open two “personal” accounts so that you can avoid APR fees on business transactions, but don’t use the same card for business and pleasure. Finally, protect your personal finances before all else––don’t use a personal credit card for business if you aren’t sure you’ll be able to cover the expenses. 

Pros & cons of using a personal credit card for business

Now that we’ve gone over the details of using your personal card for biz expenses, here’s a quick list of pros and cons for your reference.


  • Low or nonexistent startup APR 
  • May come with perks such as cashback or airline miles
  • Clear, easier-to-understand terminology 
  • Lower fee structure (as the result of the CARD Act of 2009)
  • Easy to open
  • Great for small purchases


  • Could negatively impact your personal credit
  • Your employer may not allow it
  • Account may be shut down if inactive for a period of time
  • May result in jumbled expense reports
  • Won’t work for employee bank accounts for SMBs

As you can see, whether using your personal card for business is a smart money-saving strategy, or a huge mistake really depends on the type of purchase, as well as your business model. 

How to do it right?

Accounting is the biggest challenge of using a personal card for business expenses. The IRS isn’t known for leniency, so track your business expenses––whether they’re processed on a personal or business bank card––through an expense management app such as Expensify or Quickbooks. This will make tax season much easier and ensure that you aren’t missing out on important tax write-offs or submitting incorrect statements. As a business owner, time is money. Use a separate card so you don’t want to waste hundreds of hours poring over your company’s expense reports. 

Look, we get it. Opening a business bank account can be a tedious process, and sometimes it’s not even the most-cost-effective way to proceed for your company. But when it comes to payment processing, Payment Depot has you covered with everything your business needs to get paid, starting at just $49 a month. Learn how you can save on payment processing by speaking to one of Payment Depot’s award-winning in-house customer sales reps today!

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