Can I use my business debit card for personal expenses?

By Haley Davidson

Founder & Content Strategist, Gaia Content

Whether you’re new to business or you’ve been an entrepreneur for years, you might be wondering: “Am I able to use my business debit card for personal use? After all, it’s my money.” 🤔

Plus, when you’re a small business owner, it’s easy to blur the lines between personal and business expenses. When can your business pay for your morning coffee, and when do you need to cover it with your own cash? 

Let’s dive into how and when you should use your business debit card—and the risks that can come with getting it wrong. 

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In this article:

💰Why personal and business expenses should be separated

When you’re first starting a business, it can be tempting to mix your personal and business finances. After all, if you’re the sole proprietor of the company, it’s easy to believe that they’re interchangeable. However, mixing personal and business expenses is not only messy: it can also have legal consequences.

To put it simply, when you mix your business and personal finances, you're essentially treating your business as a personal piggy bank. 🐷 And while it’s not technically against the law to make a personal purchase from your business account, it can lead to major issues with taxes,  bookkeeping, and compliance.  

By contrast, when you separate business and personal expenses, you’ll gain a clear understanding of your finances—and protect your business from future tax and legal complications. 🙌

⛔️ Risks of mixing personal expenses with business expenses

When you use your business debit card (when you should be using your personal debit card) you put yourself and your business at risk.

If you’ve already mixed your personal and business spending—don’t panic. Remember that by reading this article, you're already taking the first step towards better money management. 🙌 Plus, by becoming aware of the risks below, you can make more informed spending decisions going forward. 

As stated earlier, from a legal standpoint, you’re not breaking any specific laws when you use your business debit card for personal use. 

However, when you opened a business checking account, you signed a contract with a card issuer or account provider. This contract almost definitely included a clause about using your business card for personal expenses.

By buying something that isn’t for your business with a card meant for business spending, you’re in breach of that contract. This could put you in legal trouble down the line.

Additionally, if your business is a limited liability company (LLC) or a corporation, you’re entitled to certain protections for your personal assets if your business fails or is sued. 

However, you can lose those protections by “piercing the corporate veil.” That means when you use your business’s cash for personal expenses, you could be putting your personal assets at risk in the event of a lawsuit or bankruptcy. 😬

🔎 Lack of visibility into cash flow

Understanding your business’s cash flow will help you make informed, strategic business decisions. But if you’re always making withdrawals from your business funds for personal use, getting a clear picture of your company’s financial health will be a lot harder. 

Blurring the lines between personal and business expenses not only hinders your understanding of your financial health—it can throw you off budget, and into a cash flow crisis. When you’re spending the business’s money on personal items, you could accidentally eat into cash meant for your company’s operating expenses, savings, or payroll costs. 

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💲Messy bookkeeping 

The main reason many business owners choose not to mix their personal and business expenses is that it creates a bookkeeping nightmare. 💭

When you use your business card for personal purchases, your books become cluttered with irrelevant transactions, making it challenging to keep accurate records. Plus, when tax season rolls around, sorting through all these mixed transactions can be a massive headache. 😓

💸 Tax-time drama 

That brings us to taxes. If just the thought of tax season makes you nervous, then the idea of combining business transactions and personal transactions should make your skin crawl. 

Business owners need to use their expense reports, income statements, and other financial documents to file their taxes. However, if you made personal purchases all year, you’ll find it takes hours ⏱ to figure out which transactions were personal, and which were business-related. 

Even if you do spend days categorizing your spending, you might make some costly mistakes. If you categorize a business expense as personal, you could lose out on legitimate business tax deductions—or worse, end up in tax trouble if you claim a personal expense as a business write-off. 💰

🤵 Audit-readiness 

Let’s say an audit comes, and the auditor discovers that you’ve been making personal purchases with money from your business bank account. Sure, you didn’t do anything illegal, but potential investors and business partners may think twice about working with you and your company.

It’s crucial for small businesses to be ready for an audit at all times—whether it’s being conducted by the IRS, a potential investor, or another third party. The best way to stay ready? Keep your business card for your business needs, and you’ll be in the clear. ✅

💳 When to use your business debit card

All these rules and warnings may seem like no fun, but they’re crucial to running a professional, legal, and profitable business. So if you can’t use your business debit card for personal use, when is the right time? 

Here are a few types of expenses that you can pay for with your business debit card. 

1. Recurring payments 🔄

Any business-related payment that happens periodically can be made with your business debit card. Examples of these recurring payments include rent payments (for your office), utility and phone bills, and software subscriptions. 

2. Everyday business purchases 📝

Need a new stapler? You can—and should—use your business debit card for things like office supplies, printing costs, and other expenses directly related to running your company. 

3. Business trips and client meetings ✈️

When you travel for business, it’s always a good idea to use your business debit card for expenses related to the trip, such as flights, hotels, and meals with clients or partners. Just make sure to keep all receipts and note the purpose of each expense. 📃  

4. Employee expenses 👷‍♀️

If you have employees who regularly make business purchases and need reimbursement, business debit cards can simplify the process. For example, Relay (that’s us! 👋) lets you issue up to 50 virtual or physical Visa® debit cards.

You can issue individual debit cards for employees, teams, or specific spending categories. This will majorly simplify employee expense management—no more last-minute expense reports or employee reimbursements. 

Plus, issuing virtual business debit cards to your team will give you real-time visibility into spending. You’ll be able to see right away if an employee is using their business debit card for personal use. Then, you can freeze or lock their debit card from your Relay mobile app. This makes business spending more convenient and secure. 🔐 

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📄 Mini-Quiz: Should I use my business debit card for personal use?

Using your business debit card for personal use can come with some serious risks. So to help you make sure you’re using your business card the right way, we’ve created a mini-quiz to test your knowledge. 📝

Let’s walk through a short story about a hypothetical business owner named Beth. Throughout Beth’s busy day, she makes many purchases. See if you can pick out which purchases should be made with her personal debit card and which should be made with her business card! ⬇️

Beth starts her day by heading to her favorite local coffee shop, buying a coffee ☕️ for herself, and opening her email. She checks her work calendar but notices that her subscription to the calendar software is running out, so she renews her subscription 🗓.

In the morning, she works on organizing some data for her organization before heading to a company-sponsored lunch event. After paying the caterer 🥯 for lunch and enjoying the meal, she heads to the photoshoot area where her organization is offering new headshots for all employees. 

Wearing the new blazer she bought 👩🏽‍💼 for her headshot, she gets a perfect photo before paying the photographer 📸 for their services.

Check your answers below! 

Annnnnnnd time! Let’s review.

  • First, Beth bought a coffee. She may have been working while enjoying the coffee, but it’s not a required or necessary purchase for running her company, so it should come from her personal account. ❌

  • However, since her calendar subscription is used for work, it counts as a business expense. ✅

  • Likewise, meals and entertainment for business purposes are legitimate business expenses, so she can pay for the caterer with her business account too! ✅

  • Unfortunately, even though her new blazer looks great on her, it wasn’t necessary to run her business. She’ll have to pay for it using her personal credit card or debit card. ❌

  • Last but not least, the photographer’s payment is strictly related to work, so it can be paid for using her business credit card or debit card! ✅

⬇️ The bottom line 

Now that you’ve learned the do’s and don’ts of using your business debit card, you’re ready to handle your company expenses like a pro. Remember to keep personal and business expenses separate, use your business debit card for appropriate purchases, and stay organized with your records.

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✅ Instantly issue 50 business debit cards with Relay

Relay is an online banking and money management platform that lets small business owners open multiple, no-fee checking and savings accounts. With Relay, you can also issue 50 virtual and physical debit cards to stay on budget—and stay on top of team spending. 


Here are just a few reasons why small business owners love using Relay for their business banking (and debit cards): 

  • 20 free business checking accounts: Relay doesn’t charge overdraft fees, maintenance fees, or require a minimum account balance. That means you can easily organize your money into multiple accounts (like profit and operating expenses) and get crystal clear on earning, spending, and saving. 

  • ✅ Automated savings: Relay helps you add more breathing room to your budget with automatic savings. Plus, you’ll earn 1-3% APY* on every dollar. 

  • 50 physical or virtual debit cards: With Relay, you can instantly issue 50 physical or virtual cards. Digital cards can be used right away for online shopping or with your mobile wallet.  

  • Simplified expense management: Want to organize spending and stay on track with your budget? Relay lets you quickly issue debit cards for new expense categories, project expenses, or separate teams. 

  • Online card controls: No phone calls required. Relay allows you to monitor transactions in real time, set spending limits, and freeze cards right from your phone or computer. 

  • Accounting software integrations: Relay allows you to sync detailed banking data directly into QuickBooks Online or Xero, making bookkeeping a breeze.

  • ATM accessibility: Relay’s physical Visa debit cards allow you to make cash withdrawals and deposits at AllPoint ATMs with no ATM fees. 

Ready to get started with Relay? You can apply for an account online in less than 10 minutes. Sign up for Relay here. 😎