Can I Use A Personal Credit Card For Business Expenses?

When it comes to owning a business, it is pretty common to keep your personal finances separate from your business finances. However, if your business isn’t already built up, you may have to rely on your personal finances to get off the ground. You might simply not be eligible for a business credit card yet.

That begs the question,

Is using a personal credit card bad for business?

Can I Use A Personal Credit Card For Business Expenses?

Why You Shouldn’t Use a Personal Credit Card For Business

Whenever you create a new business entity, you are creating something that is separate from you personally. The business itself is the entity that will earn income, not you. This means that the business will also need to pay bills and acquire its own forms of credit independently. When you use your personal credit card for business expenses, you end up blurring the line between your personal expenses and your business expenses, which can lead to financial or legal repercussions later down the line.

Let’s say someone sues your business. You might have a difficult time proving that you are a separate entity from your business.

You should also be aware that businesses are often eligible for certain credit card rewards that regular consumers don’t get access to. In many cases, you could get up to 25% off for hotels, dining, and gas, which is a pretty good deal that would be unwise to pass up.

The silly thing about this is that most small businesses need personal guarantees in order to qualify for credit cards. When it comes to your accounting, this can make it difficult to keep the two things completely separate.

When You Might Consider Using Personal Credit Cards

You might wait to get a business credit card until your business starts making some actual money. If you live in a state with a very long registration process, or a state that has really high fees or high taxes, waiting can be the smart move.

You might also want to consider holding off on getting a business credit card if you run a cash business. In this case, you might end up using your personal credit card every now and then to make up for differences. Of course, if you choose to use your personal credit card, you should make sure that you keep track of your expenses.

Final Thoughts

Here at Personal Tradelines, our goal is to help our clients find the right tradelines for their needs while providing them with necessary financial knowledge and information so that they can make the best decision for themselves and their futures.

Consider all of the above when deciding whether or not you should be using a personal credit card for your business transactions.

If you feel you are ready to start your journey to better credit, make sure to get in touch with us to discuss our many different tradeline options.