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Using personal credit card for work expenses: 8 tips

Charging work expenses on your own card can be a money trap or a sweet way to snag extra rewards. Here's what you should know


It’s common, but not always fair, for companies to ask employees to pay work expenses upfront and get reimbursed later.

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Your boss wants to fly you to a conference in Hawaii to wine and dine a group of bigwigs, but without a company card, you’ll have to put the expenses on your own plastic. Not only do you worry whether your credit line can cover all the expenses, but carrying around all that debt on your own card, even temporarily, can feel uncomfortable.

It’s common, but not always fair, for companies to ask employees to pay work expenses upfront and get reimbursed later, said Alison Green, a former manager who runs the work advice site Ask a Manager.

Green has fielded questions from employees who aren’t too happy about the practice. For example, one reader wrote that her slow-to-reimburse employer wanted her to front $1,000 to attend a mandatory conference, which would cause a financial hardship.

So what do you do when confronted with a similar situation? We’ll start with some overall guidance, and then offer eight tips for using a personal credit card for work expenses.

See related:  Your personal credit score is up. Time for a business credit card?

Things to consider when using personal card for work expenses

First, get clear about the reimbursement policy 

Before you buy even a coffee for a client with your own card or cash, get clear on your company’s policy about work expense reimbursement, says Jim Angleton, president of AEGIS FinServ Corp, an issuer of business credit and debit cards.

“You can’t just go out and aimlessly spend without having that discussion,” he said. “Say, ‘Hey, I’m taking X to lunch at XYZ restaurant. Am I good?’” After all, if your company decides not to authorize an expenditure, you’re on the hook for those charges, he said.

Not everyone has the cash flow to be able to float these expenses upfront, and employers don’t always think that through.

Many companies put caps on spending for certain types of expenses, such as business lunches or parking, said Kevin Winters, a CPA and founder of CompanyMileage, which handles employee reimbursements. “You don’t want to learn that the hard way,” he advised.

Some employees love the rewards …

In general, though, using your own card for business expenses might work fine if your financial situation is good, said David Weliver, founding editor of the personal finance site Money Under 30. “For someone with a healthy credit line and a couple of credit cards, it’s not a problem,” he said.

In fact, some employees love racking up the extra miles or points on their rewards cards, Green says. For example, San Diego resident Kerri Gois works in marketing for an Internet search company and attends about one conference a month in various U.S. cities. She pays for her travel with a cash back rewards card that she also uses for personal spending to maximize rewards, which she collects as a statement credit.

“It’s free money toward my balance,” she said.

Others have limited access to credit

Maybe you have bad credit and can’t get a card or all your cards are maxed out. In those cases, covering a work expense can be tough. “Not everyone has the cash flow to be able to float these expenses upfront, and employers don’t always think that through,” Green said.

That was the case for Weliver, of Money Under 30, when he was in his early 20s and got a marketing job that required him to travel to conferences several times a year. Each trip cost an average of $1,000, and he often didn’t have that much available credit.

“Every time a trip would come up, I’d wonder ‘How am I going to handle this?’” Weliver said. Once, he was checking into a hotel and his card got declined. Another time, he asked a co-worker to pay for his room. “It was very embarrassing and stressful,” he said.

If you can’t cover expenses, talk to your boss. Keep it professional and don’t divulge personal details about how your ex drained your bank account or your dog’s vet bill left you broke. “If you come in with a whole sob story, it’s going to provide more opportunities for them to scrutinize you,” Weliver warned. “Just say, ‘I’m not in a position to put this on my card.’”

Ask about alternatives, Green recommended. Maybe the company could give you a cash advance or prepaid debit card, make your travel arrangements directly or ask a manager to use her corporate card. The human resources department might be able to help, Green said.

And if you regularly incur work expenses, your company really should give you a company credit card, she noted.

See related:  Should you get a corporate credit card?

Tips for using your personal credit card for work expenses

Using your personal credit card for work expenses can be a money trap or a sweet way to snag extra rewards depending on your circumstances and how you handle the situation. Here are eight ways to make sure you’re not getting the short end of the deal when you agree to charge anything from a business trip to a ream of copier paper on your personal card.

1. Know you’re lending your company money

When you pay for a work expense with your own credit card, you’re essentially making a loan to your employer, so think it through carefully. Here are some points to consider before you float your boss money by charging a company expense on your credit card:

  • How long have you been working for the company? Just as creditors look at length of credit history when deciding to extend credit, you’ll want to consider the length of your relationship with the firm.
  • How long has the company been in business? While a long track record in the industry is no guarantee of solvency, companies without much of a history may present a greater risk.
  • Does the company have known money issues? Take note of any red flags: Did you overhear your boss having a tense conversation about “making payroll” or notice the receptionist fielding lots of calls about past-due invoices? If you suspect your employer has cash flow issues, you might want to hold off on using your personal card for work expenses.

Businesses have gone bust with reimbursements outstanding, Angleton said, and added that some companies are new, small and have low cash flow and poor or no credit rating. He said: “If that’s the case, do you really want to use your card for their purposes?”

2. Keep a separate personal card for business use

Just as small business owners are encouraged to keep their work and personal expenses separate, you’ll want to do the same. It’s best to apply for a rewards card that you’ll use only for business expenses, Winters said.

There are two big reasons it’s a good idea to keep a separate credit card for work:

  • A dedicated credit card makes record keeping easy: By using a card only for work expenses, you avoid having to wade through all your daily Starbucks visits to find the charge for a client coffee meeting when filling out your reimbursement request. A separate card can be a huge time (and hassle) saver.
  • A separate work card shields your privacy: Your company may require you to provide a copy of your credit card statement when you request reimbursement. By using a dedicated card, you prevent your boss from getting a peek at your personal purchases, Weliver said. Even if you have nothing to hide, it can be awkward to reveal your spending habits to your employer, or to root through your desk drawer for a sharpie so you can redact those liquor store and fast food purchases before turning in your expense report.

3. Don’t use a card with a balance for work expenses

Not everyone is in a position to apply for a new card to use for work expenses, though. You might not have enough time to apply and receive your card before you need to go on that business trip or make that purchase. Or, you might prefer to avoid the ding on your credit that could result from new credit inquiries.

Whatever the case, if you can’t or don’t want to get a separate card for work, avoid checking into the conference hotel on a card with a balance. There are two reasons to use a card with a zero balance instead: It prevents confusion (you know exactly how much you owe on the card for work) and helps you avoid interest.

When you use a card with a balance, the debt you’re already carrying will negate the credit card’s grace period, so you’ll start racking up interest on work costs right away. “That’s definitely something to avoid,” Weliver said regarding charging a company expense on a debt-laden card.

See related:  How to lower your credit card interest rate

4. Know work charges could affect your credit

Another factor to weigh before using your personal card for work: how will it affect your credit score?

In some cases, using your card for work won’t have much effect on your credit. Or, if it causes a temporary dip in your score, that may not cause you any problems. But in certain situations, charging company expenses on your own card might directly harm you, Green said. Here are some questions to ask that will help you decide if it’s a bad money move to charge work expenses on your card right now:

  • What is your credit utilization ratio? This is a term that refers to the amount of your available credit limit that you’re using. Your credit use accounts for almost one-third of your FICO score. A good general rule to follow is to keep your utilization ratio below 30%. If you’re already loaded down with debt and your boss wants you to charge pricey conference tickets, you may want to think twice.
  • Do you plan to apply for credit soon? Your credit utilization ratio may be an issue if you’re planning to apply for a mortgage or other loan soon. With a mortgage application, even a slight change to your credit profile could throw a hitch into the process or even raise your interest rate. If that happens, it could cost you thousands of dollars extra over the life of the loan – all because your boss asked you to charge those plane tickets to the conference on Maui.

However, if you have a very low credit utilization ratio or you know you won’t be applying for credit within the next few months after charging a work expense, then you may have no issues.

5. Avoid using your debit card for work expenses

Let’s say you plan to apply for a mortgage soon and have decided you don’t want to put any work expenses on your personal credit card. But you still need to make those travel reservations, so you pull out your debit card.

If you plan to use your debit card for work, there are several factors to consider. First, make sure using your debit card won’t interfere with your personal cash flow and put you in a financial bind. You don’t want to spend weeks eating ramen or avoiding your landlord because you floated a work expense on your debit card.

Also keep in mind that most hotels and some rental car companies will place a hold, possibly for hundreds of dollars, on your card. “With a credit card, it’s a hold against your credit limit,” Weliver said. “With a debit card, it’s real money.” That ties up your own funds until the hold drops off.

If you plan to use your debit card, ask the hotel or car company the amount of the hold. You might not be able to get a definitive answer on how long it will be in place because your bank or credit card company policies also factor in, Weliver said. So using your debit card “is not ideal,” he added.

6. Keep detailed records of work charges you put on your card

Keeping meticulous records will help you make sure you get back every cent you spent, and it will limit the time and effort you spend filling out reimbursement forms.

Don’t rely on your credit card statements: receipts are the gold standard for proving you incurred an expense. Write on the back of each receipt what the expense was for, when you incurred it and the people you were with, Angleton suggested. Detailed records are key for a speedy reimbursement, Winters pointed out.

And it’s not just for reimbursement: If you ever get audited by the IRS, you might need to show proof of the money you spent for work because reimbursements are not taxable income, Angleton said. The problem: The ink on physical receipts tends to fade fast, and you might have turned over those receipts to your boss back when you requested reimbursement.

To make sure you have lasting records of the work expenses you put on your personal credit card, use a smartphone app to snap a photo of each receipt. “A smart employee will take a picture of the reimbursement check too and keep it in the app,” Angleton said.

7. Get reimbursed quickly when you use your card for work

It’s one thing to make a “loan” to your company when no actual money leaves your bank account because you’re using a credit card. It’s another thing entirely when that credit card bill comes due and the reimbursement money still hasn’t hit your account.

This can turn into a real issue if you pay for, say, plane tickets and an Airbnb rental months before a trip and then don’t get reimbursed until a month after your return. If you buy a plane ticket way in advance, ask if you can get reimbursed for the cost right away, Weliver said.

If your employer will work with you to reimburse you quickly, you may be able to rely on your credit card grace period so that you never have to spend any of your own money on the company expense. A grace period typically lasts about 21 days, and represents the time during which you can pay for an expense with your credit card and avoid paying interest as long as you pay your bill in full.

Slow reimbursement may be the biggest employee gripe about fronting expenses. “If you don’t get reimbursed for six weeks, it can be a real headache,” Winters said. If you get hit with interest on your credit card because of slow reimbursement, it’s fair to ask your employer to pay the finance charges, Weliver mentioned.

8. Pay off work charges on your card right away

Not everyone is a personal finance whiz, and employees who have faced challenges managing their own money may find it daunting when work expenses get added to the mix.

The problem is this: When you put an expense on a credit card, it’s easy to put the charge out of mind and forget you owe that money. And when you get reimbursed, your employer may tack the reimbursement amount onto your regular pay.

Whether you’re consciously tempted or just not paying attention to the fact that your paycheck was a bit bigger than usual, it can be easy spend some of that reimbursement money that was supposed to go to your credit card bill, Weliver said.

The last thing you want is to end up in credit card debt, paying interest months or years down the road just because your boss asked you to front the company cash by paying for your hotel room and meals at a conference. To avoid the lure of frittering away that lump sum, make a payment on your credit card as soon as the reimbursement hits your bank account, Weliver advised.

Bottom line

Play the game right, and using your own plastic for work might be a painless way to earn enough rewards to pay for your plane ticket for a well-earned vacation next year.

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The editorial content on this page is based solely on the objective assessment of our writers and is not driven by advertising dollars. It has not been provided or commissioned by the credit card issuers. However, we may receive compensation when you click on links to products from our partners.

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