No, it is not illegal to use a business credit card for personal use. However, there are reasons you may not want to. After all, business credit cards are designed with business owners in mind, so the cards’ rewards and benefits are geared more toward business needs than consumer needs. Using a business credit card for personal expenses can also make things a little harder when it’s time to file your taxes. You cannot deduct any of the personal expenses charged to a business credit card as business purchases. If you do have too many deductions, it’s likely the IRS will get involved, and that can make things very painful.
The rewards with business credit cards are also different from what a consumer might need. For instance, many business credit cards reward you most for expenses like office supplies and telecommunication services. Business credit cards often come with other features that aren’t as important for consumers, too. For instance, many business credit cards have very detailed expense tracking and spending reports.
Another reason to avoid using a business credit card for personal use is that business credit cards aren’t covered under the CARD Act. The Credit CARD Act of 2009 introduced a number of regulations to protect consumers from abusive practices by credit card issuers. However, business credit cards were excluded from the CARD Act. This means business credit card users don’t have to be given notice before their interest rates get increased, among other things. While many business credit card issuers have voluntarily extended the CARD Act protections, it’s not a requirement.
If you’re interested in a business credit card for personal use because of the rewards, you may be able to find a consumer credit card with rewards to fulfill your needs. There are lots of really good options available right now, including offers with big rewards bonuses and high credit limits.
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