Is It Okay To Use Personal Credit Cards For Business Expenses To Get Airline Miles?

catherine | The Watercooler | Wednesday February 19 2014

Using Your Personal Credit Card For Business Purposes To Get “Airline Miles” May Get You “Grounded”

I got a great question from a bookkeeping client in Chicago.  And it is a common one:  “Can I use my personal credit card for my business expenses to get airline miles?”

My answer, as usual, is a defensive one.  Defensive because I run a bookkeeping business.  I am not a lawyer, CPA or financial advisor.  I am just the one who makes you look good in front of them.  So, my defensive answer is this:


It depends.

It depends on where you are going.  Not on vacation but where you are going with your business.  To you, owning your business may just be a means to earn a living.  My view is that the business you own is more than that, it is an asset.

It is an asset because eventually you are going to get out of the business.  Whether you sell it, pass it on to your heirs or just shut it down and move to Florida, it is still an asset.


To give value to a business as an asset, you have to demonstrate the flow of money.

And if you use your personal accounts for business purposes, it co-mingles the funds.  For most businesses, it is just a bookkeeping hassle.  But when you begin to view your business as an asset, co-mingling funds can make the value of your business a little fuzzy.

How could that effect things?  Let’s say you want to sell the business one day.  The interested party on the other side wants to know how well your business performs to determine a value.  If they see inconstant bookkeeping practices, co-mingling of funds, they may raise questions or devalue their estimates of your business.


Now, what if you’re not selling but want to hang on and continue to grow your business.

You may need to open your books to a banker or interested investor to raise money to fuel your growth.  That fuzziness begins to show up again.  And what these people like to see is a sharp set of books.

They have seen too many small business owners who want to borrow or sell and their accounting looks like they have been flying by the seat of their pants.  Therefore, they become more cautious in moving forward.


The general rule is to keep your business and personal expenses separate.

Now after that warning, it is still possible to use a personal mileage card.  What you want to remember is that you are using these funds for business and not pleasure.

It is great to have the benefits of using a mileage card, yet even more important to demonstrate that you and your company show fiscal understanding and responsibility.

So understand that if the credit card that you use is in your name, you and not the company benefits.

And on the other side, if you are using a company mileage card, your company is able to use those miles for any individual paid by the company.


In either case, you have to have good bookkeeping records for accounting purposes.

If you use a personal card and the company reimburses you for your travel expenses, make sure you create an expense report each month and you get “reimbursed” by the company.  This way you keep your records clear and your finances safe.

If you decide to use a company card for travel and points, just make sure the company pays for it, rather than writing a check from a personal account.  Then the records will stay clear and accurate.

As small businesses, we tend to forget how our current decisions and how we handle our funds, can make long term impacts on our businesses.  It really boils down to good record keeping.  Generally, bookkeeping and record management is not a favored activity of my clients but that is why they hire us.

So do not get grounded by confusing record keeping and airline miles, give us a call and we will help you keep the books straight and your business flying high all year long.

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