Have You Ever Used Your Business Credit Card for Personal Expenses? [Survey]

credit cards

Most entrepreneurs know that there are many benefits that come with having a business credit card. Having a card that’s solely used for business purposes allows you to make purchases related to your company in one place so that you can keep personal financial purchases from affecting your business life, and vice versa. Though many people know that they should be keeping these accounts separate, we wanted to determine how many people were actually following this best practice.

Do You Ever Use Your Business Credit Card for Personal Expenses?

We surveyed 1,000 small business owners and asked them if they have ever used their business credit card for personal expenses. The results we found were surprising! Almost 25% of the small business owners we polled said that they have used their business credit card for personal reasons.

Regional Breakdown

In addition to discovering that almost a quarter of people have used their business credit card for personal reasons, we found somewhat surprising variance across regions. Those that live in the West were the most likely to have used their business card for personal reasons at 34%, while people that live in the Northeast were the least likely at 23%.

Gender Breakdown

The gender disparity we uncovered was even more surprising. A full 65% of men admitted to using their business credit on something personal, while just over a third of women said that they’ve used their business credit card for non-business related expenses. This may be because many studies show that men feel more comfortable taking risks with their finances, while women tend to be more conservative with their financial choices and are more likely to follow rules.

The Dangers of Mixing Business and Personal Expenses

These findings were somewhat unsettling, as the dangers of mixing business and personal expenses can be severe. Those that don’t prioritize separating their business and personal expenses are more likely to encounter hurdles like negative impacts to their credit, potential difficulties getting loans for their business, and more stressful and time consuming bookkeeping.

If you have less than perfect credit in your personal life, allocating your funds strategically minimizes the potential of unfavorable impacts on your business. Even if your credit score is stellar, keeping these funds separate can help streamline your financial management process across all areas of your life.

Easy Ways to Separate Your Business and Personal Finances

Those that prioritize keeping their accounts separate enjoy advantages like simplified bookkeeping and greater ease when applying for a business loan. Separating your finances can also help you avoid negatively affecting your business credit score with your personal spending habits. In some cases, just having a business credit card can help you earn a tax break.

While there are many benefits of owning and using a business credit card, these advantages only exist if you use your card properly. Because the line between work life and personal life is blurrier for small business owners than for those with a regular nine-to-five job, entrepreneurs are often more likely to mix their business and personal finances despite the dangers that can accompany this practice.

Sources: Entrepreneur | Comm Bank | Fundera

Founding Editor and VP at Fundera at Fundera

Meredith Wood

Meredith Wood is the founding editor of the Fundera Ledger and a vice president at Fundera. 

Meredith launched the Fundera Ledger in 2014. She has specialized in financial advice for small business owners for almost a decade. Meredith is frequently sought out for her expertise in small business lending and financial management.

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