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Using personal credit card for business

The last post in this topic was posted 818 days ago. 

 

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I have a new business and was wondering can I use my personal credit cards for my business but pay them out of my business account?

 

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Hello Iweingart,

 

That is a good question. There is nothing wrong with using personal cards for business. There can be some serious advantages actually. Check out the Credit Card Act of 2009:

https://en.wikipedia.org/wiki/Credit_CARD_Act_of_2009

 

It actually stops credit card companies from raising interest rates and charging excessive fees.This kind of protection is not available for business cards. However, I personally would limit the business usage of credit to certain accounts. That is what I do personally. I have over 30 open personal credit lines and one year, when my business was struggling, I used 8 of those lines of credit. My bookkeeper made a lot of extra money that year sifting through the pile of rubble I created.

 

Personally I really like cash back cards. The Blue Amex Preferred, gives a 3 percent discount on gas. It is amazing. I drive a lot for my business and it all ads up. That card also offers 6 percent on groceries. I have an NFCU card that I use for meals. That card gives me 3 percent back on all meals. The card I really want now is that new Uber Visa that pays 4 percent back on meals, however I need to wait a little bit before applying because I am in a refi.

 

I hope to see more responses to your great question.

 

Regards,

CreditMBA

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I know several people who run multi-million dollar business who run certain expenses thru their personal credit card.

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There are two problems with putting business expenses on your personal credit.

 

#1 - Over time, you will weigh down your personal credit with expenses and debt, and inquiries on your personal credit report can drag down your scores and debt-to-income ratio. The goal should be to separate your business debts and liabilities from your personal. It does you no good to have a strict legal structure separation (LLC) if you then co-mingle everything back together on the financial end. The moment you pay a business debt/expense with personal funds, you just eliminated that protection.

 

#2 - Personal credit, expenses, and debt oftentimes only gets reported to personal credit bureaus... and corporate credit bureaus (such as D& B) may not accept those transactions as business-based. One of the reasons D&B has been able to skirt the Fair Credit Reporting Act for so many years is because they do not accept transactions that are based on personal credit into the business credit file.

 

As I said, the goal should be to separate your business debts and liabilities from your personal... not just for your protection, but also because you need to build up a strong business-based credit history, and that needs to be founded on the business's capacity to carry it's own weight. Later, you are going to want your company's credit to stand on it's own merit (ultimately to end the need for a personal guaranty), but that will take longer, or never happen, if you carry your company's responsibilities in your personal name and on your personal credit.

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There are 2 reasons I asked this question number 1 being I don't see how I would qualify for a business credit card when the business is brand new. Number 2 is that I really like the bass pro rewards I would get with the bass pro card.

 

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There are 2 reasons I asked this question number 1 being I don't see how I would qualify for a business credit card when the business is brand new. Number 2 is that I really like the bass pro rewards I would get with the bass pro card.

 

Sent from my SM-G935T using Tapatalk

 

 

This I agree with as I am trying to open a store the "business" just does not have the funds yet but I do.. I have no choice but to use some personal money to move forwards.. I can pay myself back later from the business account to the personal .. but what else can one do?

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I have a new business and was wondering can I use my personal credit cards for my business but pay them out of my business account?

 

Sent from my SM-G935T using Tapatalk

The biggest problem with this is that you can look over extended on your personal reports when using personal cards for business. Unless you are able to pay off your personal cards each month before they report, your personal credit scores will tank creating difficulty in getting more credit or credit line increases. If you obtain business credit cards that do not report to your personal, you can leverage your high personal scores to get decent credit lines on your business credit cards and based on the cash flow of your business, you will find it can be easier to get higher credit lines on your business cards.

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