Why Did I Get A Business Credit Card In The Mail? Can You Use A Business Credit Card For Personal Use?
Can you use a business credit card for personal use? If you have your own business it may be time to consider a business credit card. Don’t worry – you don’t have to have an incorporated business or even an actual registered business. You don’t even need a business name. Whether you are a huge corporation, a partnership, a limited liability corporation (LLC), or just a sole proprietor who does business in your own name, you can get a business credit card.
Why Did I get a Business Card Offer?
Today many people get business credit card offers in the mail, even when they don’t have a registered business. But can you use a business credit card for personal use? You didn’t ask for it, so why did it show up? This is probably because today so many people seem to be doing something on the side to earn extra money, from selling the results of their hobby to selling their old kids’ clothes online to doing odd jobs, that banks are looking to find new customers from these small business ventures.
Business credit cards have become big business for banks, so they have taken to spreading the net wide, extending business card offers to almost anyone hoping to reign in a few business owners.
The fact is that nearly anyone can get a “business” credit card if you have any type of business at all. You don’t have to have a registered business, an employer identification number (EIN) or anything other than a name, address, social security number and income. Theoretically, you can use a business credit card for personal use, as long as you are using it responsibly and not doing anything illegal as far as tax breaks.
Business Credit Cards Advantages and Disadvantages
Having a business card offers a variety of business credit cards benefits. They may offer higher credit limits, the ability to track spending and more, as we describe in our article LINK. However, there are some potential disadvantages to be aware of.
Some of the consumer protection laws that protect individuals with credit cards may not apply to business credit cards. For example, banks that issue business cards are not required to let you opt in or out of over the limit fees. While many cards do treat business cards in a similar way to personal cards they don’t all, so it is important that you read the fine print of your business card application and agreement.
Often, though, business cards have lower APRs than personal cards, which is obviously great. However, it is also best that your business try to stay out of debt and pay your cards off each month.
Then again, business credit cards can also allow your business to earn cash back rewards or airline miles. This can be a great way to help mitigate the costs of doing business.
Business Credit Card for Personal Use: A Word of Caution
There are advantages of small business credit cards. Many business owners want business credit cards so that they can make it easier for their employees to handle business expenses. But it is important that you are cautious. Remember the following when giving employees credit cards:
- Your business is responsible for the employee’s spending, even if they charge personal things on the business card.
- Give your employees an orientation of some sort before you give them a card. Tell them what is an allowable expense, what is not, how you expect the card to be used, what they should do if the card is lost or stolen, and what their monthly budget is.
- Check card usage at least every month. When the statement comes in look at individual credit card usage and ensure that it meets your expectations and what is allowable.
- If an employee who has a credit card quits or gets fired have the card disabled immediately.
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