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We hear this question a lot: “Can I put personal spending on a small business credit card?” As far as I'm aware, there's no law against it. And many people see this as a method of meeting the large spending requirements to earn a big welcome bonus on business credit cards. So even though it's not illegal (as far as I'm aware), that doesn't mean banks want you to put personal spending on business cards.
Enter the email I received yesterday.
Back in June of 2022, I applied for the Capital on Tap Business Credit Card, which you might not be familiar with. Along with a big welcome bonus available back then, the card continues to offer 1.5% cash back on all spending and no annual fee. But yesterday, Capital On Tap sent me an email asking for an extensive list of documents related to my recent spending. Here's a look.
Email About Spending on Capital on Tap Business Card
Yesterday, I received an email from Capital on Tap with a list of eight recent transactions over the past month, asking me to confirm that these are business expenses. The email also asked me to submit the following:
- How do these transaction(s) relate to your business? What the funds were spent on/ what was purchased?
- Please attach any receipts/invoices from these transactions
- Provide invoices sent to your customers for the goods/services provided within the last three months
- Please provide the three most recent months' business bank statements
- Provide link to your business’ website and/or social media presence
- Please attach a Certificate of Good Standing
- Your document must include all of the following:
- Your business name
- Official stamp, signature, or barcode from the registered state secretary
That's… a lot. Sure, I can easily get a letter of good standing for the LLC my wife and I operate, which all of my freelance work is funneled through. It's a business, after all. But some of this doesn't exist. What's our website — my writer profile at sites I've written for?
Related: Wondering Whether You Qualify for a Business Credit Card?
Moreover, the list of documents is a bit difficult to complete when the expenses include expenses for an upcoming trip that I will be able to write articles about and get paid for those. That's a business expense, as far as my tax agent has told me, but that doesn't mean I have receipts or invoices for not-yet-performed work (writing the article on a trip that hasn't happened yet).
The start of the email stated: “The Capital on Tap Business Credit Card, issued by WebBank, is a revolving account intended for business-related expenses. As such, regular reviews are conducted on our customer's accounts, as part of our responsibilities in servicing these lines of credit.” So this may be a regular process, but my review also might have been triggered by something specific.
The last two months of our gym membership were both charged to this card. I'll claim a mental error on this, as we also have another Visa with the same last four digits as the Capital on Tap card. Perhaps this triggered the inquiry.
Responding to the Email
I responded to Capital on Tap's email pointing out some of the complexities of asking me for invoices that don't exist and a business website that doesn't exist. I explained that I do freelance work and that some of these items were expenses for an upcoming trip about which I would write articles, but there are no customer invoices or payments as of yet.
Ironically, I already got a response saying “thanks for submitting your documents” and that the bank will review them, get back to me within five business days, and that I might be asked for additional clarity. I'm guessing I will get asked for sure, given that was the point of my email.
Bottom Line
And now we're back to the age-old question: Can you charge personal items to a business card? Nothing is physically stopping you from swiping that card, no. But you might receive an inquiry about items that look very personal (a hotel reservation or a gym membership) on a business credit card. That is the card issuer's right, after all.
In my situation, I got an email asking for a heap of documents after some “these look personal” charges appeared on my account. The list of documents is also difficult to compile in my situation, and I also admitted the error about the gym membership charge (which I've already rectified). Where will we go from here? It's hard to tell. But it just goes to show that you should be careful if you're using a business card for personal expenses. You might be asked to justify those charges — and the request might come with a ton of homework.
What happens if I simply don't send the documents? That wasn't clarified in the email, but I have a strong feeling that not complying with this inquiry would make me a suspicious customer in the bank's eyes, possibly leading to account closure, so it's worth playing nice.
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