Can I use a personal card for business expenses?

Whether you’re launching a startup or running an established company, credit products are an important source of capital and a great way to make safe transactions.

Although plenty of cards are created specifically for small businesses, personal credit cards  can also be used to cover business expenses. And they often are.

Seventy-six percent of small business owners regularly used personal credit cards for their business expenses, according to a 2022 report from Mastercard on small business banking. Of those 76 percent of people, 53 percent used both business credit cards and personal credit cards, while 23 percent used only personal cards. Meanwhile, only 10 percent of small business owners used just business credit cards.

So why, as an entrepreneur, would you want to opt for a personal card for your venture rather than a business credit card? For some small business owners, personal cards are easier to access and offer lower annual fees, as well as the chance to tap into their rewards offerings. They’re often the better choice for businesses that are in the early stages, as well. But business credit cards have their own advantages, too.

Here are the top situations where you’d likely be better off using your personal credit card for business expenses and where you’d likely be better off getting a business credit card.

When to use your personal credit card for business expenses

You may find that a personal credit card is your best — or only — option for your small business expenses. That’s often the case when these situations come up:

You can only qualify for a personal card

Most business credit cards require applicants to have good to excellent credit scores. If you’re new to credit, or if you have a bad credit score but need a credit card for business purposes, you can use a personal credit card as a stepping stone. A personal card is easier to get and can help you establish credit, which will ease your way into qualifying for a business credit card.

There are plenty of credit cards for those with bad credit or little to no credit history, such as secured credit cards. The credit lines for these types of cards generally start small, but after you manage the account responsibly, the issuer will likely raise the line. After you’ve built or repaired your credit, you can choose a business card that suits your needs — if you decide that you need one, of course.

Your business is a temporary or sporadic side hustle

While you can use a business credit card without your business being a full-time pursuit, you might not benefit much from doing so, especially if your venture is something more casual. For example, maybe you walk the dogs in your neighborhood after your full-time job ends to earn a little extra cash, or maybe you do freelance photography as a side hustle. Yes, you’re running your own operation that has expenses, but you likely don’t need to take out an extra line of credit to fund it.

If you have a couple of personal rewards cards already opened, select the one that has the greatest cash-back, miles or points earning potential for the expenses associated with your business. As long as you pay the bill in full by the due date, you’ll come out ahead with the rewards.

You want to streamline your credit management

The last thing small business owners want is to spend time on unnecessary tasks. This may be reason enough to lean into the credit cards you opened for your personal life. That’s what Vanessa Gordon, publisher of East End Taste Magazine in East Hampton, New York, decided to do.

“A business credit card will be just another card to keep track of,” says Gordon, who keeps track of her costs by printing out the account statements, then identifies which are business and which are personal. “I’m looking at screens more often than I want, so printing and highlighting helps me to compare different spending. I just find it easier to use my personal cards.”

Since her magazine has her globe-trotting, Gordon uses the Emirates Skywards Rewards World Elite Mastercard®* and the Citi / AAdvantage® Executive World Elite Mastercard®. Each is rich with travel perks, including access to some of the world’s best airport lounges. The rewards are ideal for her business, too. She charges a variety of expenses to her cards, including:

• Flights
• Gas
• Food
• Accessories for photo shoots
• Photographers
• Videographers
• Event planners

By paying the balance off each month, she gets to take advantage of her card perks while also keeping her personal credit score safe.

You may get similar perks for a lower annual fee

When searching for a credit card that offers rewards and benefits for your business, check out the annual fee and the benefits. As long as you get more out of the card than it costs, that fee will be fine. However, if a personal credit card has great perks at a lower cost than the business card option, you may want to take that instead.

The Business Platinum Card® from American Express, for instance, has a $695 annual fee. And though it comes with a generous welcome offer of 150,000 Membership Rewards points, you’ll have to spend $20,000 on eligible purchases within the first three months of opening the account to get it.

Depending on your needs, the American Express® Gold Card, which has a $250 annual fee, may be a more attractive option. With it, you can earn 60,000 points with a much lower minimum spend and longer timeframe: $6,000 on eligible purchases within the first six months of opening the account.

Always compare credit card offers and annual fees before applying. The best card for your business could very well be a low- or no-annual-fee card developed for personal use.

You may be able to avoid financing fees for a longer time

Both business credit cards and personal credit cards can come with an amazing introductory feature: the ability to charge expenses and carry a balance over for a fixed time period without interest being added. This is called a 0 percent introductory annual percentage rate (APR) offer.

When you’re making large purchases for your business, such as for new equipment or software, avoiding interest for a set period of time can save you a huge amount. Many of the best 0 percent introductory APR deals are for personal credit cards, making them appealing to small business owners trying to save money.

That’s what Kim Hawkins did. Hawkins is president of EventsWholesale.com, a discount event and wedding planning supply company based in Watkinsville, Georgia. Her company recently started manufacturing commercial grade plastic columns and colonnades in house — an especially expensive endeavor.

To get what she needed, she decided to open a Chase Freedom Unlimited®, which gave her a 0 percent introductory APR on purchases for 15 months from account opening.

“This Visa allowed us to purchase almost $100,000 worth of columns on the card and pay everything off the following year, after we started bringing in more revenue, with zero interest,” says Hawkins. “On top of that, we received a cash back bonus, and points that we can use towards travel for future conferences and trade shows!”

You may get stronger legal protections

Yet another reason a business owner may choose a personal card over a business card: legal protection. The CARD Act of 2009, a powerful consumer protection law, doesn’t apply to most small business credit cards. This law assures cardholders that the issuer can’t raise the account’s APR without cause or fair warning.

Some business credit cards do offer the same or similar consumer protections as those that are guaranteed for personal cards, but not all do. If you can’t get a business credit card that voluntarily offers that protection, you could consider a personal account instead because it is legally obligated to do so.

Another thing to keep in mind is the vulnerability of your personal credit. Many consumers assume that using a small business credit card will protect their personal credit score, but that’s usually not the case.

Most small business credit cards still require cardholders to provide a personal guarantee. This guarantee assures the issuer that if an account goes delinquent, it can pursue the business owner for damages. Not only will it hurt the person’s credit history and scores, but their assets are at risk of liens and levies if the creditor takes the matter to court.

When to get a business credit card for expenses

You might be better going with a business credit card as opposed to a personal card when the following situations occur:

You want to provide employee credit cards

Business credit cards usually allow you to add employees to your credit card account by giving them each their own employee credit card. The best business credit cards also allow you to track individual employee spending and set spending limits on each card.

While you can technically add employees as authorized users on personal credit cards, you’d be taking a big risk in doing so. Your and your employee’s personal credit scores will become intertwined, meaning that you’d be liable for their spending habits and your credit score could take a hit as a result.

You want to make the most of your personal credit profile

If you can qualify for a business credit card, it could help you better optimize your personal credit. Most card issuers don’t report your business activity to credit reporting bureaus unless there’s something negative to report. This means you could have a higher credit utilization ratio on a business card, for instance, without that impacting your personal credit score.

You can also use your new small business credit card to start building your business credit, which is important if you ever need loans or other financial products for your business in the future.

You’re looking for rewards geared toward business spending

Rewards on business credit cards are more geared toward business spending, such as on office supplies. Business credit cards also tend to offer a variety of statement credits that could help you with your overall operation. The Amex Business Platinum, for example, offers statement credits like:

• Up to $200 semi-annually per year on Dell purchases (up to $400 total)
• Up to $90 per quarter on Indeed hiring and recruiting products and services (up to $360 total)
• Up to $200 per year for qualifying airline fees with a selected airline
• Up to $10 per month for telephone service purchases made directly with  a U.S. wireless provider (up to $120 total)

Business credit cards tend to offer higher credit limits, too, so you’ll have more spending power to devote to your business.

You want to keep better track of business expenses

As your business grows, it can get difficult to separate your personal spending from your business spending. You will need to keep diligent records to track business expenses and for tax purposes, and that could get time consuming. Having a dedicated business credit card could make keeping track of your business expenses easier.

Plus, some business credit cards come with bookkeeping software integration, so you’d be able to easily track and categorize not only your own spending, but the spending of any employees with their own cards, too.

How to manage a personal card for business expenses

Just like it’s not illegal to use a business card for personal costs, there is no law that says you can’t use a personal credit card for your business. Once you have a personal card, be sure to use it appropriately for your business. The rules are simple:

• Pay on time and keep revolving debt low. These are the two most important factors when it comes to your credit score.
• Maximize your rewards. From earning a welcome bonus to earning points, miles or cash back, you can find plenty of ways to earn rewards with a personal credit card. Just pay your bill on time due date every month.
• Separate and track your business expenses. If you’ll be using your card for both business and personal expenses, review your statements every month. You’ll need to know how much your business is spending so you can project for the future and plan for taxes.

Using a personal credit card for business expenses isn’t as hard to manage as you might think. By practicing the same good spending habits as you would with your personal expenses, you can build your credit while also earning rewards.

The bottom line

You can absolutely use your personal credit card for business expenses, and many small business owners already do. If your business is still pretty new, if you can’t qualify for a business credit card, or if your business isn’t a full-time pursuit, you’re likely better off using a personal credit card for now.

*The information about the Emirates Skywards Rewards World Elite Mastercard® has been collected independently by Bankrate. The card details have not been reviewed or approved by the card issuer.