Anyone here use personal credit cards for business expenses?

[Anonymous]

Hi,

I am wondering if anyone here uses a rewards-rich personal credit card for business use, then having the business reimburse you every month (or have the business pay the card itself directly).

I have several personal and business cards; one of my personal cards I've had to use to cover on the road business expenses where AMEX is not accepted (I only have AMEX business cards).  I am pondering applying for a dedicated business VISA card, but I don't want another hard pull on my credit reports right now, and I also very rarely work with vendors who don't accept AMEX or Paypal, so I rarely would need to use a Visa card for the business.

I don't use debit cards at all for security purposes and the fact that most have horrible rewards.

I did some research online and if you do the accounting and reimbursement correctly, most banks and credit card issuers have no problem if you use your personal credit card for business use.  The only issue I can see is that if you put heavy expenses on the card and don't pay it off at the end of the month, your business spending will start to hurt your personal credit due to high balance reporting and high utilization.....

Does anyone else here use their personal credit cards for business expenses like me?  If so, has it been a big problem for you or no issue at all?

[Jazzzy]

Do you work for someone or are you self-employed?

My husband and I are both self-employed and use our personal cards all the time for business expenses (in order to get the rewards). Heck, we put an $11,000 furnace on one of our VISAs. It's a bit more of a mess at tax time needing to sort it all out, but just be careful to save your receipts.

We've never had any of our card compaines question what we do.

[Anonymous]

Hi Lynette,

I'm a business owner of disregarded entities, so I guess I am a little of both - I am the sole shareholder/officer of several corporations, so I am legally a W-2 salaried employee plus an owner/shareholder at the same time.  

Sounds like the situation works out well for you and your husband.....can you elaborate though on why it's a mess on tax time?  I was just planning on linking the personal card to my Quickbooks business account and have the corporate checking account directly pay the credit card bill every month, so everything reconciles without any special input on my part.

[Janice618]

I started my business with personal credit cards and as we grew, I basically put them in the company's name but the rewards are mine.  That would probably work if you, like you mentioned, use personal cards for travel and get reimbursed by your employer.  If you own the company, get cards issued for those other employess that have business expenses, still use expense reports but rewards all accrue to you.

[llecs]

I'm in the same situatio, OP. We dumped our biz cards and use personal CCs as business cards. I find myself more accountable to make sure they get paid early and earn rewards in the process. You can also write off the interest if you use the entire CC for biz only and you carry a balance.

[Anonymous]

I can't resist. I'm cruising this site trying to understand how to untangle myself from the very thing you speak of.

I built a business over 11 years without any external financing --- other than my personal AMEX. All was well until the international meltdown. Though my payment history had been religiously on time and I was paying into the principal significantly each month, I was suddenly notified that my credit had been frozen at $20,000 LESS than my current balance (and at the time, that was $20,000 less than my ceiling.) So with a balance of $72,000 and a ceiling of $92,000. I was suddenly informed that my new ceiling was $52,000 and instead of 20k under my ceiling, I was now 20k over my ceiling.

This resulted in my having to cut the amount I was paying down on the card to the minimum and use two other cards to take care of monthly operating expenses that I put on the card -- like my server for my website etc. I was complaining about AMEX to a fellow business owner (we both work in Europe and while I'm a media company, he is involved in sales of heavy manufactured exports from the US. The same thing happened to him -- only the big surprise came while he was traveling in the Middle East, his card was frozen and he couldn't get a hotel room. He sued AMEX.

I've now gotten educated about Business Credit versus Personal Credit (when you're the owner and its a small business of 12 - 15 people this can get mixed really easy.) DON'T TRUST AMEX and get it all separated. I've been sweating blood all this year but it looks like I'll have it figured out in a few months. It's taken a year however and has impacted my ability to run my business.