Don't Pay for These 4 Expenses With Your Business Credit Card

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All kinds of businesses can benefit from a credit card. Business credit cards can streamline your spending and make tax season a lot easier, plus many come with perks that can save you time and money.

These can include purchase protection, reimbursement for trusted traveler programs, and bonus rewards on spending for marketing, internet service, and trips to the office supply store.

Despite these great features, a business credit card isn't right for all your spending. Here are a few times you should skip the credit card and use a different form of payment instead.

1. Your personal spending

First and foremost, a business credit card isn't to be used to cover your own spending. It's solely for your business expenses. If you want to buy new clothes, get a new personal computer, or take a vacation that isn't work-related, use your personal credit card.

Consumer credit cards have rewards programs that are much more geared toward the kinds of purchases you make in your everyday life. And one of the reasons to get a business credit card in the first place is to keep your personal and company spending separated.

2. A large purchase -- sometimes

A credit card can be an excellent way to make a large purchase, under certain circumstances. Here are those circumstances:

• You have the cash saved for the expense and intend to use your credit card to get rewards and purchase protection, then pay the card off immediately.
• You have a 0% intro APR offer and are using it to finance a large purchase over time, paying it off entirely before the intro period is up and your card starts charging its go-to rate (which could be 18%, 20%, or more).

If you don't fit either circumstance, I caution you against using a business credit card to make a large purchase, unless you truly have no other options.

A better choice for a large necessary purchase you can't afford outright (such as equipment for your business) is a small business loan. It's likely to come with a lower interest rate and more favorable payment terms than a credit card, like set monthly payments and a fixed payoff date.

3. Payroll

If you have staff working for you, you might wonder if it's okay to pay them using your business credit card. This isn't a great idea, for a few reasons. For one, your credit card's terms and conditions may not allow you to cover payroll with the card.

And if you're in a situation where you can't afford to pay your employees otherwise, it's worth taking a closer look at your books and making sure you're not overextended. Your staff works hard and they deserve to be paid -- and if you can't actually afford to do so without relying on credit, you may need to make some cuts somewhere.

4. Your mortgage or rent

It's not super likely that you'd be able to charge your business's rent or mortgage payment on a credit card anyway. But if you're given the option, this is best avoided.

For one thing, you'll likely be charged a processing fee to use a credit card for a rent or mortgage payment, if they're accepted -- that could be 2% to 3%, making your rent cost that much extra. And even if your credit card pays that high of a percentage as rewards, you're only breaking even. And now you have a potentially larger problem: paying off the credit card and avoiding interest charges.

Honestly, you shouldn't need to pay for the space that houses your small business with a credit card. If you don't have the money on hand in your business checking account and need to use a card to cover this cost, it's worth considering whether you're getting in over your head with your business expenses vs. income.

Ready to get a new credit card for your small business? I applaud this move. Just don't use it for any of the expenses above.

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