Yes, you can redeem business credit card rewards for personal use. However, there are reasons you may not want to. After all, business credit cards are designed with business owners in mind, so the cards’ rewards and benefits are geared more toward business needs than consumer needs.
What You Should Know About Business Credit card Rewards
Business credit card rewards are deductible expenses: Credit card rewards are generally not taxable, but the IRS will expect you to subtract them from your business expenses report. You'll have to consider the rewards as discounts on your business expenses, which will reduce the amount you're able to deduct on your taxes. Plus, if your business is a corporation or an LLC, earning rewards on personal expenses may threaten your liability protections, so your personal assets can be at risk.
How to use your business rewards: Financial professionals don't recommend mixing your business and personal accounts, especially if you are not the only owner of your organization. So, instead of using rewards for personal purposes, you can use them to boost your business, such as funding some of your company’s operations.
How to maximize your rewards: Make sure to analyze your business spending when earning rewards. Then, redeem those rewards wisely. To do so, take into consideration the redemption options, as some may offer more value than others.
It’s also worth keeping in mind that business credit cards are not covered under the CARD Act. So, certain protections like being notified before an interest rate increase do not apply to business credit cardholders. However, many issuers have extended CARD Act protections to include business credit cards. But this is not a legal requirement.
Usually a business rewards card gears toward business related perks anyway. So, you might get more value from one of the best personal rewards credit cards instead.