Can You Use Business Credit Cards For Personal Spending?

Merchant fees are a PERCENTAGE right?

If you spend more, the issuer is already getting more…?

Merchant fees in the US are on that list of things that make the your country absolutely insane. How is it sustainable?

Its all priced in from sale perspective. Insane is a good term, benefiting if you understand the system but majority ends up paying more without knowing it, as merchant fees are typically not displayed. As opposed to the local fees, save-Jenny-the-three-legged-dog-levy, workers-protection-charges etc that bloat the typical American bills.

An attorney warned me that if I use a corporate credit card for personal use someone suing the corporation might be able to get around the corporate protection & go against me personally. That attorney told me to only use corporate credit cards for business purposes & to always pay for those credit cards with the corporation's checking account. Another attorney told me that it would take a lot more than that to get around the corporation protection.

They're both right, to an extent. Comingling your personal finances with those of the corporation could potentially provide a basis, in conjunction with other evidence, to pierce the corporate veil. But merely sometimes using a small business card for a personal expense almost certainly wouldn't be enough, without more. Comingling assets is a piece of evidence that could be used against you, but someone suing you would need to show that you essentially disregarded the corporate form entirely and treated the corporation as your alter ego.

If you're relying on your corporation to shield you from personal liability, you may be better off keeping good records separating corporate financial transactions and activities from your own personal activities. (Note: not legal advice; you should consult a lawyer about the specifics of your situation and the liabilities you may face.)

Merchants get a lot of benefits from accepting cards. They have increased sales (and therefore higher profits) and lower transaction costs (e.g., they don't have customers holding up the line while they fumble around for cash; they don't have to worry about cash missing from the register; at stores that go cashless, they don't need to worry about employees making bank runs every day; etc.). Clearly the fees charged are less than the benefits merchants obtain because nearly all merchants these days have made the decision to take cards.

Is this unfair to consumers who pay cash? No, because cash payments have significant costs associated with them as well (e.g., some percentage of a merchant's incoming cash just goes missing; there are bank fees on merchants that make large cash deposits; merchants that accept cash need to dedicate employee time to count, secure, and deposit the cash). Increasingly a lot of places are going cashless because it's ultimately cheaper for them to just accept cards and not incur the costs and hassles of handling cash.

That car rental insurance point is potentially very important.

Agreed.

The insurer could easily deny coverage in an ink card used for personal driving.

That is the whole point. Most charges or merchants would be tough to prove.

The primary reason banks want to keep business accounts separate is because different laws apply to consumer accounts. For example, if you read the FCRA, you'll notice that it defines "consumer report" as pertaining only to credit "used primarily for personal, family, or household purposes." So, business cards aren't covered by the many consumer protections that consumer financial transactions receive. As long as you pay your bills on time and don't have any other billing disputes, you might not notice any issues. But, if push comes to shove and you need to enforce your rights under the FCRA, FCBA, or their implementing regulations, you might find out that the bank holds all the cards. So, the credit card issuers want to make sure they are complying with the relevant laws, and they also don't want to waive their beneficial position with respect to business accounts by allowing customers to charge personal expenses such that the customers could then claim that they should be covered under the more protective consumer laws.