Banks could push for more business purchases on personal cards

In recent years, new laws have made the difference between credit cards for personal and business use quite stark, but banks may soon start encouraging consumers to make company purchases on their own accounts.

Today, about 21 percent of credit card users make business purchases as part of their job, up from 17 percent in October 2008, according to new data from the latest Cardbeat report from Auriemma Consulting Group. But at the same time, fewer are making business purchases on their own accounts. Currently, 45 percent do so, down from 62 percent a few years ago.

However, banks may see this type of purchasing as attractive, and may encourage consumers to begin doing so more often, the report said. This is because payments made with personal cards for business reasons are almost always reimbursed by their employers, meaning that the likelihood for delinquency on any such payment is quite low, particularly when compared with personal transactions.

The most common type of business transaction on a credit card is office supplies, with 87 percent of respondents saying they made such a purchase, the report said. But again, just 45 percent of people making these purchases did so using their own credit cards, down slightly from 51 percent in 2008. At the same time, though, the number of people who used their personal cards for business expenses when traveling (mostly for meals and hotel accommodations) was much higher, at 60 percent.

The latter trend suggests that consumers would more often use their own cards for business purchases if they could be sure of discerning between their own expenses and those that come as part of their professional responsibilities, the report said. Consequently, it may behoove banks to start making partnerships with companies like hotel chains to increase rewards and other perks for these purchases as a means of encouraging more card use on personal accounts.

Consumers who regularly use their credit cards for either professional or business purchases may want to also take the time to check their credit reports regularly. Doing so will help them to discover any unfair markings that may be having an adverse effect on their credit ratings and general finances, and working with a credit repair company can help to clear them up.