Can You Put Personal Expenses On A Business Card?

I had a former coworker ask me an interesting credit card question the other day. I gave him the short answer, but I thought that it might make for an interesting post as well, since there are often some misconceptions about this and it comes up fairly frequently. His question to me was “Can I put personal expenses on a business card?”. Specifically he is a Hyatt guy and was looking to get the World of Hyatt Business Credit Card. He has a small business but it isn’t something that generates a lot of revenue.

(SEE ALSO: Business credit cards even if you don’t (really) have a business)

So he was worried about meeting the minimum spend unless he put some of his personal expenses on his business card, and he was wondering if it was okay to put personal expenses on a business card?

Is There A Law Against Putting Personal Expenses On A Business Card?

The question of whether you can put personal expenses on a business card is a bit complicated, but the first bit of good news is that legally, you are almost certainly fine. There is no law that governs what expenses that you put on any particular credit card. No matter what kind of expenses you put on your card, the IRS or the government is not going to care, unless maybe you run up so many charges that your account goes into collections and you get a judgment or have to file bankruptcy. Putting personal expenses on a business card is not generally considered fraud.

Do Credit Card Companies Want You To Put Personal Expenses On A Business Card?

The other half of the question is whether credit card companies want you to put personal expenses on your business card. There, the answer is a bit more complicated. Most credit cards specifically market personal and small business cards as separate kinds of cards, and some may even include language indicating such in their terms of agreement. For example, the terms and conditions of the Ink Business Preferred® Credit Card include the following text:

By becoming a Visa Business Card cardmember, you agree that the card is being used only for business purposes and that the card is being issued to a public or private company including a sole proprietor or employees or contractors of an organization.

However, in 99.9% of the cases, the credit card companies are not going to be going through your transactions and “verifying” if they are “for business purposes”. In many cases, they wouldn’t really be able to distinguish them anyways, even if they wanted to. I have literally never heard of someone who got “in trouble” for using a business credit card for personal expenses.

Should I Put Personal Expenses On A Business Card?

Of course, just because you CAN put personal expenses on a business credit card doesn’t mean that you SHOULD. Some people may be turned off by that language in the terms and conditions, and not feel comfortable applying for a business credit card. That is fine if that’s what you prefer, though you should be aware that you are leaving 50% (or more) of your potential miles and points rewards on the table by not taking advantage of small business credit cards.

The other thing to consider is that putting personal expense on a business card can make things more complicated for your bookkeeper, accountant or tax preparer. If you have a sole proprietorship or other business that doesn’t really have many expenses, or if your business isn’t going to file a separate tax return, it’s less of an issue. But if you have an actual business with real revenue and expenses, comingling your personal expenses and business expense on the same card or account can make for an accounting nightmare. Still, if you’ve got a system to handle it or if you’re willing to deal with it, there’s not really anything stopping you.

The Best Business Cards

Here is a look at some of my top recommendations for business credit cards, if you’re looking to sign up for a new one.

• Chase Ink Business Preferred® Credit Card – Earn 90,000 bonus points after you spend $8,000 on purchases in the first 3 months from account opening. You’ll earn 3x category bonuses on the first $150,000 on travel and select business expenses but only 1x on every day spend and a $95 annual fee
• Chase Ink Business Unlimited® Credit Card – Earn $750 bonus cash back after you spend $6,000 on purchases in the first 3 months from account opening. $0 annual fee. You’ll get 1.5% cashback on all purchases.
• Chase Ink Business Cash® Credit Card – Earn $350 when you spend $3,000 on purchases in the first three months and an additional $400 when you spend $6,000 on purchases in the first six months after account opening. You’ll earn only 1x on everyday spend and 5x on on the first $25,000 in combined purchases at office supply stores, internet, cable, and phone services and no annual fee. Comparing the Ink Cash to the Ink Business Unlimited will depend on how much of your regular spend is in these bonus categories
• The Blue Business® Plus Credit Card from American Express – no annual fee (see rates and fees), 2x Membership Rewards on every purchase and a welcome bonus where you can earn 15,000 Membership Rewards® points after you spend $3,000 in eligible purchases on the Card within your first 3 months of Card Membership (though I’ve seen the bonus vary over time).
• The Business Platinum Card® from American Express – this card has a $695 annual fee (see rates and fees) but comes with a variety of premium benefits (but only 1x on everyday spend, though there are bonuses in some categories and for large purchases). Currently it has a bonus where you can earn 150,000 Membership Rewards® points after you spend $20,000 in eligible purchases on the Card within the first 3 months of Card Membership.

The Bottom Line

Many people wonder if you can put personal spending on a business card, and generally the answer is yes. It’s not illegal, and while many (most? all?) credit card companies say that you shouldn’t spend personal items on a business card, there really isn’t any way that they are going to “find out”. I have not heard of anyone ever get in trouble for putting personal expenses on a business credit card.

What do you think? Have you put personal expenses on a business credit card? Leave your thoughts in the comments below

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