Personal Credit Card Vs Business Credit Card

Hi all,

Wanted to get your opinion on using personal credit card for purely business use only given there are more attractive offers on personal credit cards such as bonus points, no annual fee (for the first year), etc compared to business credit cards.

Are fees and interest charged still tax deductible if purely used for business?

What is your say on this?

Comments

  • -2

    Not certain, but I thought most personal credit cards explicitly exclude any business use in their T & C’s – so that may come back to bite you if you claim the spending as a business expense and get audited by the ATO.

    I do agree that personal cards generally come with better terms and lower fees, so if you can find a card that allows for personal & business spending, I’d say go for it.

    • +2

      so that may come back to bite you if you claim the spending as a business expense and get audited by the ATO

      I am curious - why would the ATO care about whether you breached T&Cs of your bank's credit card or not?

      • I think you will be able to claim expenses related to your business credit card for tax deductions.
        I am not sure if you will be able to do the same with your personal card.
        Also business credit cards can be used by authorized person (other than you) of the business. If some one had to pay bills etc while you were on vacation. this would not give you benefit if you are the only person running the business.

        • +1

          So long as you keep a paper trail of what is personal use and what is business use, method of payment should not matter. If you work from home and use your internet 50% for work, you can claim that as a tax deduction, but you obviously won't be able to split the payments based on the proportion of use.

        • I think we should be more clear on what "expenses related to your business credit card" actually is. If you mean bank interest charges on a credit card by that, then yes, it could be tricky to claim that as a business expense if that is a personal credit card.

          However, if you mean regular purchases by that, then I am afraid you are wrong. If I go to a store and purchase something for my business with my personal credit card, I can deduct that as a business expense as long as I have a receipt (possibly even without it). The ATO has no right not to recognise that as an expense.

        • @brightaussie: I was mentioning the cc fees, interest, account fees etc. not the amount spent on purchases.

    • There's no reason why you can't use a 'personal' credit card for your business, even if it was 50/50 business/personal.

      if purely business use, even easier to justify the credit card fee.

Login or Join to leave a comment