Personal Versus Business Credit Cards
A lot of people these days have their own personal credit cards as well as credit cards for their businesses. It can be a bit difficult to juggle two different types of cards, but it will not be a problem if you understand how each of these cards is meant to be used. Once you have this information, you will have no trouble keeping track of your expenses and choosing the right card for each purchase. If you have both types of cards, do what you can to learn what appropriate expenses are for each, just as you would try and be careful while selecting student loans.
Many consumers make the assumption that you can use these two different types of cards interchangeably, but this is not a good idea. This can really cause things to get messed up, especially when it comes to accounting issues. If you are constantly mixing personal and business expenses on these different accounts, then it's going to take your accountant a lot longer to figure things out when it is time to do your taxes. You will probably end up having to pay higher fees to him or her to sort out the issues.
Deciding Which Card to Use
If you want to make sure that you keep things as easy as possible for your accountant, then you need to make some decisions on which card to use. If you are going to be buying something that will be for personal use more than 50 percent of the time, then this is something that should be put on your personal credit card. If you use it for your business only a small percentage of the time, then it is best to keep it on your personal card. If you find that you will use it more than that, then you can consider using your business card.
Obviously, if you are purchasing something that is intended for your small business, then it needs to be put on your business card. Often, you have no choice but to do this because business cards usually have a limit that is a lot higher than a personal credit card. Even if you can afford to put something like this on your personal card, it's not a good idea to do it if it will be used for business purposes. If you think about how you will use things before you make a purchase, then it will be easy to get things straight.
People are often tempted to put expenses on a particular card just because of the interest rate that is on it. While you do want to save money on your purchases, it is not appropriate to use this as a means of deciding which card to use. You should stick to using business cards for business purposes and personal cards for anything that is personal to you. Doing this will make everything easier on you, your business partners, and your accountant, and will eliminate some stress at tax time.
Consider Your Credit Report
No matter how you are looking at personal versus business credit cards, you need to make sure that you are able to make the payments on a consistent basis. Being delinquent on either one of these accounts is not going to be good for your credit report. If you actually become delinquent on your business card, then this can actually show up on your personal credit report. You wouldn't want something bad like this to happen, so you need to make sure that you pay on both cards in a timely manner.
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State Guides to Credit Card Laws
- North Carolina
- West Virginia