Can you put personal expenses on a business card?
Learn about why you should avoid putting personal expenses on a business credit card.
Jan. 28, 2025
5-minute read
Business credit cards offer a lot of convenience for managing company expenses, with benefits like higher credit limits, specialized rewards and tools that streamline tracking and reporting. These features can make a big difference for business owners who want a clear picture of their spending and simplified bookkeeping come tax time. However, when it comes to using a business card for personal expenses, things might get tricky.
While it may seem harmless to put a personal charge on your business card now and then, there are important implications to consider. Here's what you need to know about using a business credit card effectively — and why it's usually best to keep it for business purchases only.
Legal and policy considerations
There isn't a law explicitly prohibiting the use of a business credit card for personal expenses, just as there's no rule against using a personal credit card for business expenses. In fact, many small business owners start out using their personal cards for business purchases. However, most credit card issuers include specific terms and conditions stating that business cards are for business-related spending only.
While issuers are unlikely to enforce this rule every time or penalize users for occasional personal expenses, frequent personal use could flag your account and the issuer may choose to close it.
There are also tax implications to consider. When a business wants to deduct the card's annual fee as a business expense, the deduction applies only to the percentage used for business purposes. If the card is used solely for business, the entire fee is deductible. However, if it's used for both business and personal expenses, you'll likely need to track the percentage that was business-related to avoid tax issues and ensure you're taking legitimate deductions.
Why would someone want to use their business credit card for personal expenses?
While keeping business and personal expenses separate is generally a good idea, some people may still consider using their business credit card for personal purchases from time to time. There are various reasons this might happen.
Certain business cards offer significant reward multipliers on categories like travel and transportation. For example, the CIBC Aventura® Visa* Card for Business offers higher rewards on travel and transportation compared to its consumer counterpart, the CIBC Aventura® Visa Infinite* Card. This could make the business card an attractive option when booking flights or paying for hotel stays — even for personal travel.
Certain expenses might blur the line between personal and business. For example, if you're on a business retreat but add a few days for a personal vacation, splitting expenses down the middle might be tricky. However, it's important to be cautious — many business cards, like the CIBC Aventura Visa Card for Business, specify that these higher multipliers are intended for business-related expenses only, so you'll want to ensure any travel charges are tied to work trips rather than personal getaways.
Why not to mix business and personal expenses
There are clear downsides to mixing business and personal charges on a business credit card. Sorting through your business credit card statements at tax time becomes more complicated if you regularly make personal purchases. You'll need to carefully separate deductible expenses from personal ones, which could take extra time and effort — and any mistakes could result in issues with the Canada Revenue Agency.
Mixing expenses may also create confusion when managing finances. For example, if you're trying to assess your monthly cash flow for business operations, personal expenses could cloud the accuracy of your business expenses, making it harder to plan effectively.
Tips for effective business money management
While an occasional personal charge on your business credit card is unlikely to lead to severe consequences, it's best to keep business and personal spending separate whenever possible.
Here are a few strategies to help you manage your business finances effectively:
- Stick to best practices: Using a dedicated business credit card only for business expenses could save time, reduce confusion and support organized, accurate bookkeeping.
- Use expense tracking tools: Many business credit cards, like those with Visa Spend Clarity, offer online tools to simplify tracking and categorizing expenses. These tools could help provide an overview of where your money is going.
- Set up policies: If you're a business owner with employees, make sure to communicate any guidelines about using business cards for business expenses only. Setting clear expectations may make it easier to enforce these boundaries.
- Review statements regularly: Take a moment each month to review your credit card statements and check that each transaction aligns with business-related expenses. This habit could prevent issues down the road and ensure you're prepared for tax season.
While using a business credit card for personal expenses may not break any laws, it's not usually recommended due to the potential tax and financial management issues it could create. By keeping things separate, you'll likely be better equipped to manage cash flow, organize your finances and ensure your business stays on track.
