Chase Cracking Down on Using Business Cards for Personal Spend?

Many people got today a secure message from Chase with the following information (bolding mine):

Dear Chase Online Customer:
Thank you for using your Chase business credit card. Please continue to use it for business purchases, but remember that it’s not intended for personal use.

The regulations that cover business cards do not provide the level of protection given to consumer cards. We want you to receive the consumer protections you are entitled to. So, please use a consumer credit card for purchases for personal, family or household use.

If you need a consumer credit card, please call us. We can help you choose the Chase consumer credit card with the features and benefits that fit your lifestyle best.

If you have questions, please call us anytime at the number on the back of your card.

Sincerely,
Card Services

(Multiple FWF users here and here got this message, as did a friend of mine.)

The main difference between business cards and personal is that there are certain consumer protections required on personal cards which aren’t required on business cards. I’m not exactly sure how those differences play out since the bank will usually cover fraudulent charges on business cards as well, but legally there are some protections which aren’t required.

I’ve always been nervous to use my INK Plus on rental cars (for it’s primary collision insurance coverage) in case there would be an accident and Chase would ask for proof that it was used for business use. Not that I’ve heard such stories, but it seems possible. Same goes for buying electronics or another item for personal use – where I want the warranty or other protections – I’ve been sure to use a personal card out of caution.

Other than that, I figured the issuer doesn’t care much if I’m willing to forgo the added protections and use the business card for personal use.

It’s possible Chase is cracking down on this, perhaps with an eye toward reward enthusiasts who find the best category on each card to maximize. Or maybe Chase is doing this for legal reasons to be able to prove that they did their due diligence in keeping people aware of the issue. My guess is the former, but we’ll have to see if it plays out in more solid action or if they’ll suffice with the messages.

View Comments (72)

  • My guess is that they are trying to protect themselves from bankruptcy issues -if they issue business card and it is used for personal use and the buisness goes backrupt the user could claim it was a business card and they are not personally responsible- also once you start handing out cards to employees they can be held responsible; have been in bankruptcy court and seen this issue raised. Chase may think this warning will protect them - saw Warning in new Chase business card . Doubt they will take any actions unless people do something outrageous like buying some large ticket item for personal use. Though userers are always personally responsible for business cards use it ends being played out many ways in court.

  • I just received my Business Ink Preferred card a few days ago. My business is eBay / Craigslist and I mainly sell Carnival Cruise , Southwest, an some retail store gift cards (NOT visa or debit), and clothes.
    I was going to use my BIP for gas, obviously gift cards, Cable, DTV, Power, Gas, Car insurance, and I am about to purchase 2 TV's from Best Buy. Are these purchases/payments ok to use on my BIP?
    I just don't want Chase to take my BIP or CSP card without notification

  • I got an email directing me to a SM. As I have two business cards (and three personal cards) on the same login, I could not tell which business card they were referring to. The Ink Bus gets about $10,000 a year in a variety of spend, mostly non-bonused The Ink Business Plus gets $20,000+ almost all in bonus spend. Both use EIN. I thought it was triggered by a $90 charge to a hair salon (they didn't take Amex, which I was focusing on for SPG min spend, and Ink Plus was the only VISA with me). Maybe that one charge set me up? No way to tell, but I feel better knowing others got it too. Yep, misery loves company!

  • I put about $1000 of non/5x office spend on my card, about 1 rental a year. My job as a freelancer is very open-ended so I can justify the purchases as work-related costs, thankfully.

  • Do you think that they'll start cracking down more on people who are applying for CIP's via a sole proprietorship business with little income?

  • You are over-thinking this waaaay too much.

    I have 3 Chase business cards (two Inks and one United). Looking back over my statements for the past 6 months, I see a clear pattern.

    The "Important News" section is just filler material - it's just boilerplate that gets inserted. Someone has a job to utilize their billing statements for other purposes (marketing, consumer info, etc.). That's all this is.

    Every once in a while they add "Important News" on the statement in a section that would otherwise be blank. On some statements, the "Important News" is the bit about "a business card is for business expenses, no protections like consumer cards, etc. etc. On other months, there's apparently no important "news" they need to share. On another Chase business card I have, I see the same "Business is for business" message some months (March, November), and I also see "Important News" with what are essentially marketing materials (space fillers) or updates to TOS. Here's one from last fall:
    Important News: UNITED MILEAGEPLUS PROGRAM UPDATES. See your United MileagePLus Card Rewards Program Agreement blah blah blah".

    This is nothing new. And I think it's just filler material (and has always been). Play on.

  • dp: only put around 1k in spend on my card per month (mostly bonus cat), did not receive message

  • Data Point: I have the old Chase Ink card with grandfathered 3x points on gas, restaurant, home improvement, office supply stores. I use my card exclusively in those categories with anywhere from $100-$800 month. I got this message.

    • Got 2 new chase ink cards today - replacements for old ones i first got in maybe 2007 or so. Grandfathered as described above. The "Business Transactions Only" and some additional warning words are included on the paper that each card was "glued" to.

      Thanks for the discussion - was a little worried - I use these for maybe $1500/month and much is non-business related.

      Will treat it as "corporate CYA", but will also be a little more aware

  • I don't think the warning is to be taken lightly as just a CYA situation as some are suggesting. I think they may shut you down eventually as there are genuine underwriting concerns about using business credit for personal uses. It alters the risk profile of the business credit they extended based on the credit profile of the business. For example, theoretically a person could have a bad personal credit profile and may be trying to piggy back off of the relatively better credit profile of a business he is associated with which may only have that better credit because of a more responsible business partner/associate. Banks don't like co-mingling since it could screw up its predictive modeling.

    • If the card is personally guaranteed by you, I don't see why the risk would be any different regardless of what types of purchases are made with it. At the end of the day, you the individual are liable for any and all debts against it.

      • You would think that is the case, except we don't see why the risk would be any different because we don't have 50 years of historical delinquency/default data to look at and they do. Perhaps they have found that folks who comingle business and personal funds experience higher delinquency. There are many oddities in credit analysis. I remember a Credit executive once telling me they can predict higher default rates for people living on certain streets versus neighbors 1 block west based on historical modeling. Which, incidentally, is why they used to engage in "red-lining" where they would draw a red line around high default zones on the map and not make loans in those neighborhoods. Until the CRA outlawed that practice and coincidentally 5 years later subprime loans imploded en masse.