In spite of the temptationsto use personal credit cards for business purposes (or sometimes the easieraccess to personal cards), it is still better to use a business card forbusiness purposes. Interestingly, NFIB survey data quoted indicates thansmall business owners are increasing their use of personal cards (49% used themin 2011, up from 42% in 2009) and decreasing their use of business cards (59%used them in 2011, down from 64% in 2009). Among the risks of using apersonal card account for business use:
If a credit card company determinesthat a business owner is using a personal credit card as “an extension ofcredit primarily for a business, commercial or agricultural purposes,” they canraise the APR without much notice, essentially making themselves exempt fromthe CARD regulations for personal credit cards. Once this happens, it could beopen season, with the credit card issuer potentially denying zero fraudliability and other protections or rewards on the card.
The other problem of using a personal credit card for business reasons is moreof a headache than a possible legal liability, it’s a record-keeping issue.Business credit cards have a variety of accounting features to help makebudgeting, expense reporting and tax filing easier.
Separation of householdfrom business expenses remains a challenge for small businesses, the majorityof which are micro businesses where the finances of the owner’s household maybe entangled. Business card issuers clearly have a growth opportunity inbuilding business use of business products. Business cards were exemptedfrom the consumer protections of the 2009 CARD Act; it is unclear whether thelack of these protections is understood by business owners, and whether or notit makes a difference in choosing to use a business versus personal card forbusiness purposes.