Can I Use Business Credit Card Rewards for Personal

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Business organization credit cards are designed to be used for business expenses. But at that place might come a fourth dimension when you'll exist tempted to use your business organization bill of fare to book a personal vacation or pay for a large not-business expense.

Peradventure you're trying to earn a lucrative sign-upward bonus or reap those coveted business organisation credit card rewards. While there are no legal repercussions to doing and then, putting personal expenses on your concern credit card is prohibited by virtually credit card issuers — and could lead to unnecessary complications around tax filing time.

Here's what you need to know.

Business Cards vs. Personal Cards

The biggest difference between a business organisation credit carte and a personal credit card is that a business card is intended for business concern expenses just. "1 of the reasons you have a business concern card is to separate your business organisation expenses from your personal expenses," says Tori Dunlap, founder of Her First $100K and host of the Financial Feminist podcast. That's because concern expenses are often taxation-deductible, and it's easier to carve up out those expenses if they're all on one card.

Business credit cards come with other benefits every bit well. If you take a growing team, Dunlap says, your employees tin be authorized users on the business credit carte account, which saves them the hassle of having to request reimbursement. And business credit cards often come up with higher spending limits and bonus rewards in certain business organization categories. For case:

• The Ink Business Preferred® Credit Card earns 3X points on aircraft purchases, telecommunications services, advertising, and travel up to a combined $150,000 per year.
• The American Express® Business organisation Gold Bill of fare earns 4X points on the 2 categories in which your business spends the about each billing bike, on up to $150,000 in combined purchases per yr.

The primary drawback of business organization credit cards is that credit card issuers are non required to provide the same consumer protections that apply to personal cards, such every bit the ones detailed in the Credit Carte Act of 2009. That means you could accept an APR increase on your existing residual or exist charged exorbitant belatedly fees. Keep in mind, however, that regardless of whether y'all're using a personal or business organisation card, y'all can ensure you'll never need to pay any interest or late fees by paying your balance on time and in full every month.

Pro Tip

If yous like your personal credit card, consider signing upwards for a business credit card from the aforementioned issuer. You'll be able to track both bills in the same spot and may fifty-fifty exist able to combine rewards.

Personal credit cards, on the other paw, are designed for your everyday household expenses. Some come up with straightforward cash back on every buy, while others offering boosted rewards on bonus categories. For case:

• The Citi® Double Greenbacks Card offers 2X points on every buy with no almanac fee.
• The Chase Freedom Unlimited® offers 5X points on travel purchased through Ultimate Rewards, and 3X points on dining and drugstores.

• Intro offering:

  N/A

• Annual fee:

  $95

• Regular APR:

  15.99%-twenty.99% Variable

• Recommended credit:

  670-850 (Good to First-class)

• Employ At present At Chase'due south secure site

• Intro offering:

  lxx,000 points

• Annual fee:

  $295

• Regular Apr:

  14.24% – 22.24% Variable

• Recommended credit:

  670-850 (Good to Excellent)

• Learn more At our partner's secure site See Rates & Fees, Terms Apply.

• Intro offer:

  Earn an Additional 1.v% Cash Back

• Annual fee:

  $0

• Regular APR:

  xiv.99% – 23.74% Variable

• Recommended credit:

  670-850 (Good to Excellent)

• Utilise Now At Chase's secure site

Tin can Yous Use Your Concern Card for Personal Expenses?

Information technology's not illegal to use your business credit bill of fare for personal expenses, just at that place are taxation implications. If you made a mistake and used your business card for a personal expense, you'll just need to flag that expense for your records and be sure not to deduct the corporeality when you file your taxes. But all those little notes to self can make things very murky if yous start using your business card for personal expenses all the time, says Dunlap.

Furthermore, most credit card issuers strictly prohibit using your business organisation credit card for personal utilise in their terms and conditions, which y'all'll need to agree to when you sign up for a menu. For example:

• The terms and conditions of the Chase Ink Business organisation Greenbacks® Credit Menu says: "you agree that the card is being used only for business purposes and that the menu is being issued to a public or private company including a sole proprietor or employees or contractors of an organization."
• The  terms and conditions of the American Express Bluish Business Greenbacks™ Card says: "By submitting this awarding, y'all, equally an individual and the Authorizing Officer of the Visitor … are REPRESENTING THAT ALL CARD(S) ISSUED ON THE ACCOUNT Will Just Exist USED FOR COMMERCIAL OR BUSINESS PURPOSES."

Consequences of Using a Business Credit Card for Personal use

If you lot violate your credit card issuer'due south policy, "your business card could get canceled or your limit could go restricted," says Bola Sokunbi, Certified Financial Educational activity Instructor, coin practiced, and founder of Clever Girl Finance. If your card is canceled due to a violation of the issuer's policy, that could too mean you would lose all the rewards points you lot've earned on the card.

Even if there'due south nothing in your agreement restricting personal apply with your business credit card, you should keep your personal and business expenses dissever. When it comes time to report your deductible business expenses come tax season, you'll be happy that they're all in one identify and not mixed up with your personal expenses.

Impact to Your Credit Score

But like you build a good personal credit score by making on-time payments and keeping your balances depression, paying off your business credit bill of fare on fourth dimension and in full tin can help you lot build credit for your business. But depending on the issuer, your business credit menu payments may also be reported to the three major consumer credit bureaus. For case, Upper-case letter 1 always reports all account activity, while American Express only reports if your account falls out of practiced standing.

Sokunbi notes that there's also a difference between a business organization credit card that is tied to your personal credit and a corporate credit card. "A corporate card, which is some other type of business carte du jour, would be a card that'due south tied to your business revenue enhancement ID, but and then the business itself has collateral or a credit profile that has been used to establish this line of credit for the business," she says.

Not everyone who applies for a business credit card volition take the business organisation credit history of a corporation. "You can take a business organization card if y'all're a freelancer or even if you're a side hustler," says Dunlap. "A lot of times when people have business credit cards, they are tied to their personal credit," Sokunbi adds.

Depending on the credit card issuer, you lot may need to provide your personal social security number, your business organisation taxation ID, or both when applying for a carte. Using your concern credit card could affect either your business organisation credit score, your personal credit score, or both, so be sure to apply it responsibly.

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Source: https://time.com/nextadvisor/credit-cards/business-credit-card-for-personal-expense/