Using payment cards for your business

Risks of financing a business with a personal credit card


Personal credit cards can be relatively easy to obtain and convenient to use. And with a range of cheap deals offering introductory interest-free credit periods, it can be tempting to use them as a supplementary form of finance for your business.

However, if you use a personal credit card to fund the business that you're running, and your business is a limited company, there is a significant risk that you, rather than the company, will be held personally liable for any debts.

In addition, it doesn't make financial sense to fund your business using a personal credit card - particularly on an ongoing basis. Although initial rates of interest may be attractive, in the long term credit card rates are generally much higher than for other forms of business borrowing.

Using a personal card to pay for business purchases also makes it more difficult to keep personal and business expenses separate. This then makes it harder to monitor and account for business expenditure.

A business payment card, bank loan or overdraft will offer much better interest rates and can be matched to your business' requirements. For more information, see bank finance.