Is it illegal to use a company credit card for personal use?

Is Swiping Your Company Card for Personal Expenses a Crime?

The short answer isn’t a simple yes or no. Using a company credit card for personal use isn’t inherently illegal in the same way that, say, shoplifting is. It’s not a direct violation of criminal law. However, it can lead to a tangled web of legal and professional consequences depending on the specific circumstances. Think of it less like robbing a bank and more like breaking a contract.

The crucial element lies in the agreement you have with your employer and the terms and conditions of the credit card itself. Most company credit card policies explicitly forbid personal use. Using the card for personal expenses is a breach of that agreement, and that breach can open you up to disciplinary action from your employer. This could range from a formal reprimand to termination, depending on the severity and frequency of the misuse.

Furthermore, the credit card agreement itself likely prohibits unauthorized use. While the company authorized you as a cardholder, they didn’t authorize you to buy groceries, concert tickets, or personal travel. By using the card for these unauthorized purchases, you’re violating the terms of service with the credit card company. This could lead to penalties, increased interest rates, or even account closure.

Beyond contractual breaches, misusing a company credit card can potentially escalate into more serious legal territory. If the personal spending is substantial, concealed, or intended to defraud the company, it could be considered embezzlement or fraud. These are serious criminal offenses with significant legal repercussions.

Another often overlooked aspect is the tax implications. Personal expenses charged to a company card can create a complex tax situation for both you and your employer. The IRS could view these expenses as unreported income, leading to tax liabilities and potential penalties.

So, while casually charging a personal lunch to your company card might not land you in jail, it’s a risky move with potentially significant consequences. The best course of action is to always adhere to company policy and use the company credit card solely for authorized business expenses. This not only protects you from disciplinary action and legal trouble but also maintains a healthy and transparent relationship with your employer.