“Can I use a personal credit card for business expenses?”—and other small business questions, answered

In this article, we’ll tackle the basics around managing small-business finances, including opening a dedicated bank account and applying for a business credit card.

6 reasons to separate your personal and business finances

1. Having a business bank account and business credit card makes it easier to track your cash flow and expenses for your work.
2. It keeps accounting costs down at tax time, since your accountant won’t have to spend time separating your personal and business income and expenses.
3. Business credit cards often come with helpful tools and services, such as higher credit limits, expense-tracking software and additional cards for employees.
4. Business credit cards often come with valuable rewards and perks.
5. Using a business credit card and paying it off each month can help you establish a credit history for your company. A good credit rating will help if you ever need to apply for a business loan or line of credit.
6. A dedicated business bank account communicates professionalism and credibility to your clients and vendors. And if you plan to incorporate your business, it must have a separate account.

5 FAQs about business accounts and credit cards

Below are five common questions from small-business owners.

Can I use a personal credit card for business expenses?

While you can use a personal credit card for business expenses, it’s not ideal. Just like with business bank accounts, business credit cards can help you run your business more efficiently. In addition to keeping your accounts separate, a good business credit card can offer all sorts of benefits like the ability to earn rewards, various types of insurance and access to valuable services. And as your business grows, separating your finances is good for your personal privacy, too.

What are the benefits of a business bank account?

Business bank accounts may offer features that you can’t get in a personal bank account. Some examples include merchant services that allow you to accept payments, access to specialized credit cards, business overdraft protection, or the ability to process funds in Canadian and U.S. dollars. Plus, having a separate account lets you build a credit history for your business, which will come in handy should you ever need a business loan to grow.

What do you need to open a business bank account and credit card?

Opening a business bank account and credit card in Canada is similar to what you’ve done with your personal accounts and cards. Different documents may be required, though, depending on the structure of your business and the product you’re applying for, but here’s a list of the documents to gather:

• Identification with your name, address and date of birth
• Social insurance number (SIN)
• Articles of incorporation/association, if applicable
• Canada Revenue Agency (CRA) business registration number
• Trade name registration, if applicable

Check what you’ll need with your financial institution before starting your application.

What should I look for in a business credit card?

The best business credit cards in Canada offer access to rewards, travel benefits and business-related perks (which you can use for business or pleasure!).

As an example, let’s look at the Scotiabank Passport^® Visa Infinite Business^† Card, a credit card that offers rewards and travel benefits that you can use for your business.

• Rewards for business transactions: Make your business expenses go further by earning 1.5 Scene+^TM points per dollar spent. Scene+ points are redeemable for travel, groceries, merchandise, gift cards and more. (Visit sceneplus.ca for more program information.) Another helpful feature: the Scotiabank Passport^® Visa Infinite Business^† Card has no foreign transaction fees. (Typically, credit cards charge 2.5% for foreign transactions.) You’ll save when travelling outside of Canada or making business purchases from U.S. vendors, for example.

• Travel perks: Travel for business in comfort with your complimentary Visa Airport Companion Program membership, which entitles you to six free airport lounge passes per year. Plus, enjoy the peace of mind that comes with seven kinds of travel coverage including rental car collision loss/damage, hotel/motel burglary and travel emergency medical insurance. (Read full details on the Visa Airport Companion Program website.)
• Money management tools for businesses: Get help managing your expenses with Visa Spend Clarity for Business, a service provided by Visa Canada. This tool helps you track expenses, set notifications, create downloadable reports and upload information to your accounting software. (Learn more on the Visa Spend Clarity website.) You can also take advantage of Visa Savings Edge, a free program that gives cardholders access to special discounts on business purchases. Plus, you can get holistic and tailored advice from an advisor through Advice+, Scotiabank’s business portal.

That’s a lot of help for the annual fee of $199 per year. Plus, you can earn up to 40,000 Scene+ points when you spend $5,000 in the first three months (30,000 points) and $60,000 in the first year (10,000 points). That’s worth up to $400 in travel rewards. See Scotiabank’s website for full card details.

Can I expense banking fees?

At tax time, the CRA allows you to deduct certain management and administration fees, including bank charges and payment processing fees. (Read more about business expenses.)

How to get a business credit card

Setting up a business bank account and business credit card will help you organize your finances. These tools will make your life easier, help you save on accounting costs, and make you more professional in the eyes of your clients. If you’re ready to get started, learn how to apply for the Scotiabank Passport^® Visa Infinite Business^† Card.

Read full details about the Scotiabank Passport^® Visa Infinite Business^† Card.

More about small business:

• How to become a contractor: The real costs
• Side hustles and self-employment in Canada: Taxes, business expenses and more
• Incorporated business owners: Should you pay yourself a salary?
• The best bank accounts for side hustles in Canada
• Self-employed? Here’s how to file taxes for a side hustle

About Keph Senett

Keph Senett writes about personal finance through a community-building lens. She seeks to make clear and actionable knowledge available to everyone.