Can You Put Personal Expenses on a Business Credit Card?

These days, some of the best credit cards have “business” in the name. 

Cards like the Chase Ink Business Preferred® Credit Card and The Business Platinum Card® from American Express offer great rewards and huge welcome bonuses.

However, there is one big drawback: They’re… you know… business credit cards. You’re not supposed to put any personal expenses on them. 

But what would happen if you did anyways? If you whipped out your Ink Biz Preferred to pay for dinner, drinks, and a PS5, would the ghost of J.P. Morgan visit you at midnight, Ghost of Christmas Past-style? 

Erika Taught Me

  • You technically need a business to apply for a business credit card but you can apply as a sole proprietor with your legal name and SSN. 
  • Putting personal expenses on a business credit card isn’t illegal, but it’s a violation of most cardmember agreements and can result in the bank terminating your account.
  • That said, we’ve never heard of that actually happening and it seems card issuers don’t enforce this rule with an iron fist.

. . .

What Is a Business Credit Card? 

A business credit card is specifically designed to help entrepreneurs and small business owners make, track, and pay off work-related expenses. 

Let’s say our friend Gwen runs an Etsy shop selling custom art. For the longest time, she’s just been putting her art supplies on her personal credit card because it’s convenient. 

But as April rolls around and she prepares her taxes, she realizes that separating her business expenses from her personal expenses is a long, tedious process. 

So she applies for a business credit card and realizes there are a ton of other benefits for her as a small business owner: 

  • A big welcome bonus, which will cover her booth fee at the next art fair. 
  • Higher credit limits, so she can make larger investments each month as her business grows. 
  • Expense tracking tools that her personal card didn’t offer, and will help her stay on budget. 
  • Business-based rewards, like 3% cashback on shipping supplies, travel, internet, and more. 
@erikakullberg

What it was like flying Emirates Business Class 16 hours #travel #emirates

♬ original sound – Money Lawyer Erika

Personal vs. Business Credit Cards

Benefits aside, how exactly is a business credit card different from the personal credit card you’ve been using for years? 

1. Business credit cards require you to have a business… sort of

When you apply for a business credit card, one of the first things the card issuer will ask you is the legal name of your business. 

If you haven’t yet registered a business, don’t fret; you can always apply as a sole proprietor. 

To do this, put your first and last name as your business name and use your Social Security number as your federal tax ID. Don’t be afraid to put $0 as your revenue, since plenty of people apply for business credit cards to help support a brand-new business.

READ MORE: How To Start a Business with No Money

2. Business credit cards may have fewer consumer protections

The next thing you should know is that business credit cards don’t have the same consumer protections as personal credit cards. 

For example, the Credit Card Accountability Responsibility and Disclosure Act (the CARD Act) limited the number and type of fees that card issuers could pepper us with. The Fair Credit Billing Act (FCBA) gave us far greater protections against fraudulent purchases, as long as we reported the fraud within a timely manner. 

But unfortunately, both pieces of legislation only apply to personal credit cards — not business credit cards. That doesn’t mean you’ll be held liable for a $4,230.42 fraudulent charge on your business account, but you may have to pay $50 of it since you won’t have “zero liability” fraud protection. 

Granted, many card issuers have begun applying CARD/FCBA-type protections to their business card accounts, too. But you shouldn’t assume you have comprehensive fraud and fee protections on your business credit card until you see it in the terms and conditions. 

RELATED: Credit Card Purchase Protection: What You Need to Know

3. You’re not supposed to put personal expenses on a business credit card

The last major difference between personal and business credit cards is that you’re not supposed to put everyday non-business expenses on the latter. 

Here’s what some card issuers have to say about such shenanigans: 

  • “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.” – Chase Ink Business Preferred® Credit Card
  • “Each Cardmember acknowledges and agrees that cards are intended to be used for the Company's commercial or business purposes.” – The Business Platinum Card® from American Express
  • “By submitting an Application, I acknowledge and agree on behalf of the Business entity and myself as the Owner/Authorized Officer … that the accounts will be used for business purposes only;” – Bank of America Business Advantage Customized Cash Rewards

Fair enough. It is a business credit card, after all. 

What Happens If You Put Personal Expenses on a Business Credit Card? 

Let’s say Gwen is just $1,500 in spending away from triggering her $1,000 welcome bonus. She doesn’t have any more business supplies to buy, so she starts putting personal expenses on her business card instead: things like dinner with friends, a trip to Nashville, and her brother’s birthday gift. 

How will Chase respond? 

Officially speaking, putting personal expenses on a business credit card is a violation of most cardmember agreements. It’s not illegal, but your card issuer may exercise their right to close your account, which could lead to a dip in your credit score and a loss of all of your credit card points. 

Now, with that being said, we’ve never actually heard of that happening. 

“Credit card companies are not the IRS,” wrote a Reddit user on r/CreditCards

It would be a big task for banks to determine what is and isn’t a legitimate business expense for each individual cardholder.

Gwen’s trip to Nashville might’ve been for an art fair. Her expensive dinner might’ve been to entertain clients. Even her birthday gift to her brother — a PlayStation 5 game — might be a legitimate business expense if her work somehow involved online gaming. 

“The issuers are not going to comb through your expenses and make a judgment on each line item as to whether or not it could be used for a business-related reason,” wrote another Reddit user. “Besides, I get offers all the time on my ‘business’ cards for 10% off at places like H&M and MAC Cosmetics. They don’t care.”

Of course, it’s best to take all this with a grain of salt. Will you have your Business Platinum account immediately closed for buying a $6.73 macchiato? Anecdotal evidence suggests that you’ll probably be fine — but it is still technically possible. 

FAQs

Do you still need to keep receipts for expenses on a business card?

Yes. The IRS requires you to maintain supporting business documents, including receipts, to back up any business expenses that you claim on your taxes.

What happens if you accidentally use your business credit card for personal expenses?

Technically speaking, putting any sort of personal expense on a business credit card is a violation of most cardmember agreements and can result in your card issuer terminating your account. But anecdotal evidence would suggest that card issuers rarely take such action.

Can you use business credit card points for personal use?

Policies may vary but, according to Chase, “You may be able to redeem business credit card rewards for personal use, but each business and situation is different.”

Can you get a business credit card without a business?

Officially, you can’t apply for a business credit card without a business. But a “business” can be as simple as your name, Social Security number, and listing $0 in revenue — in which case the card issuer would treat you as a sole proprietorship. 

TL;DR

While you’re not supposed to put personal expenses on your business credit card, we haven’t seen evidence that card companies are enforcing this rule with an iron fist. 

Still, putting personal expenses on your business account is technically against your cardmember agreement (and business cards don’t have the same consumer protections as your personal one), so it’s not risk-free. 

For more tips on managing your business finances the right way, check out these episodes of the Erika Taught Me podcast:

. . .


Disclosure: Opinions expressed here are the author's alone, not those of any bank, credit card issuer, hotel, airline, or other entity. This content has not been reviewed, approved or otherwise endorsed by any of the entities included within the post.
Latest Articles
Young Black man sitting cross-legged on the floor of a library, between shelves, reading.

Free Library Services You Aren’t Using That Will Save You Money

Two tropical drinks by a pool, with candles for 40th birthday.

How To Invest in Your 40s

Back view closeup of young woman playing darts and aiming shot.

Target Date Funds: Are They Right for New Investors?

Businesswoman pulling her suitcase through the airport while on her cellphone.

Chase Ink Business Preferred® Credit Card Review: Low Fee, High Rewards

Mother with a young daughter, who is giving her a hug from behind and a kiss on the cheek.

Why You Need Life Insurance as a Parent

Related Articles

Compare To Other Cards

Best Offers From Our partners

Reward rate

Welcome bonus

Annual fee

Regular APR

Recommended credit

Author picture

I'm an award-winning lawyer and personal finance expert featured in Inc. Magazine, CNBC, the Today Show, Business Insider and more. My mission is to make personal finance accessible for everyone. As the largest financial influencer in the world, I'm connected to a community of over 20 million followers across TikTok, Instagram, YouTube, Facebook and Twitter. I'm also the host of the podcast Erika Taught Me. You might recognize me from my viral tagline, "I read the fine print so you don't have to!"

I'm a graduate of Georgetown Law, where I founded the Georgetown Law Entrepreneurship Club, and the University of Notre Dame. I discovered my passion for personal finance after realizing I was drowning in over $200,000 of student debt and needed to take action-ultimately paying off my student loans in under 2 years. I then spent years as a corporate lawyer representing Fortune 500 companies, but I quit because I realized I wanted to have an impact; I wanted to help real people and teach them that you can create a financial future for yourself.

Advertiser Disclosure

Our aim is to help you make financial decisions with confidence through our objective article content and reviews. Erika.com is part of an affiliate sales network and receives compensation for sending traffic to partner sites, such as MileValue.com. This compensation may impact how and where links appear on this site. This site does not include all financial companies or all available financial offers. Terms apply to American Express benefits and offers. Enrollment may be required for select American Express benefits and offers. Visit americanexpress.com to learn more.

Advertiser Disclosure

Our aim is to help you make financial decisions with confidence through our objective article content and reviews. Erika.com is part of an affiliate sales network and receives compensation for sending traffic to partner sites, such as MileValue.com. This compensation may impact how and where links appear on this site. This site does not include all financial companies or all available financial offers. Terms apply to American Express benefits and offers. Enrollment may be required for select American Express benefits and offers. Visit americanexpress.com to learn more.

Advertiser Disclosure

Our aim is to help you make financial decisions with confidence through our objective article content and reviews. Erika.com is part of an affiliate sales network and receives compensation for sending traffic to partner sites, such as MileValue.com. This compensation may impact how and where links appear on this site. This site does not include all financial companies or all available financial offers. Terms apply to American Express benefits and offers. Enrollment may be required for select American Express benefits and offers. Visit americanexpress.com to learn more.