Using cash back rewards from business credit card
"A C-Corp is not a pass-through entity, any applicable taxes would be paid by the Corporation, which is a separate legal entity from yourself. If you use the points to purchase something for yourself, that would constitute ""income"" to you, and would be taxable on your personal income tax."
The biggest advantage to small business owners paid in cash is not that it might save the 2 or 3 percent that would go to the credit card company.  The biggest advantage is that they have the opportunity to keep the transaction entirely off the books and pocket the cash without paying income tax or sales tax, especially when no receipt is given, or when it's a service instead of a product being sold, or when it's an approximately-tracked inventory unit going out the door.  Although it's illegal, it's widely done, and it's also often a temptation for employees to try and get away with doing it too. Every reward program has to have a funding source. If the card gives you x percent back on all purchases. That means that their business is structured to entice you to pump more transactions through the system. Either their other costs are lower, or the increased business allows them to make more money off of late fees, and interest. If the card has you earn extra points for buying a type of item or from a type of store (home stores improvement in the Spring), they are trying to make sure you use their card for what can be a significant amount of business during a small window of time. Sometimes they cap it by saying 5% cash back at home improvement stores during the spring but only on the first $1500 of purchases. That limits it to $75 maximum. Adding more business for them, makes more money for them. Groceries and gas are a good year round purchase categories. Yes there is some variation depending on the season, and the weather, but overall there is not an annual cliff once the season ends. Gas and groceries account for thousands of dollars a year these are not insignificant categories, for many families are recession proof. If they perceive a value from this type of offer they will change their buying behavior.  My local grocery store has a deal with a specific gas station. This means that they made a monetary deal. Because you earn points at the grocery store and spend points at the gas station, the grocery store is paying some compensation to the gas station every time you use points. The gas station must be seeing an increase in business so theoretically they don't get 100% compensation from the grocery store.  In cases where credit cards give airline miles, the credit card company buys the miles from the airline at a discount because they know that a significant number of miles will never be used. Most corporate policies strictly prohibit the card's use for personal use, even if the intent is to re-pay in full, on or before the due date.  I'm certain it has something to do with limitation of liability, i.e. the monetary risk the company is willing to put itself at, in order to offer a corporate card program. In my experience, AMEX Corporate Card Services is the most widely-used card, and in my experience, it is your employer that determines and administers the policy that outlines the card's appropriate use, not the credit card provider, so you're best to check with your employer for a definitive answer to this. Early on, one might not be able to get credit for their business. For convenience, and the card perks, it makes sense to use the personal card. But for sake of a clean paper trail, I'd choose 1 card and use it exclusively, 100% for the business. Not one card here, one card there. "My visa would put the goods on the current monthly balance which is no-interest, but the cash part becomes part of the immediate interest-bearing sum. There is no option for getting cash without paying immediate interest, except perhaps for buying something then immediately returning it, but most merchants will do a refund to the card instead of cash in hand. This is in New Zealand, other regions may have different rules. Also, if I use the ""cheque"" or ""savings"" options at the eftpos machine instead of the ""credit"" option, then I can have cash immediately, withdrawn from my account, with no interest charge.  However the account has to have sufficient balance to do so." "Just to add about using debit card as ""credit"" vs ""debit"" way: In addition to the difference of having to enter the PIN when using ""debit"" mode (vs having to sign in ""credit"" mode), for stores that offer cash back (i.e. get cash out of your account at the same time as paying), you can only get cash back when using ""debit"" mode." "How does adding a revenue stream from the most profitable and widely penetrated products in existence read to you as ""shooting blind""?  Do you have any idea what interest rates on a card like this are?  If you've ever worked retail, you know that credit card sign ups are a key metric nearly every employee is judged by" A few years ago, I had the rare opportunity to take advantage of a credit card offer. Specifically, a 10% cash back deal on purchases at drug stores or supermarkets. The offer was limited to 90 days, so during that time, I bought 100 cash gift cards at my local CVS.  Over the next year to use them all, when they dropped to a balance under $5 or so, I signed in to my cable TV account and charged the remaining balance there. No bothering a supermarket clerk, or store owner. Credit card fees on a credit card used for personal expenses are not tax deductible. Credit card fees on a business credit card are deductible on schedule C (or whatever form you're using to report business income and expenses). If you are using the same card for both business and personal ... well, for starters, this is a very bad idea, because it creates exactly the question you're asking. If that's what you're doing, stop, and get separate business and personal cards. If you have separate business and personal cards -- and use the business card only for legitimate business expenses -- then the answer is easy: You can claim a schedule C deduction for any service charges on the business card, and you cannot claim any deduction for any charges on the personal card. In general, though, if you have an expense that is partly business and partly personal, you are supposed to figure out what percentage is business, and that is deductible. In an admittedly brief search, I couldn't find anything specifically about credit cards, but I did find this similar idea on the IRS web site: Generally, you cannot deduct personal, living, or family expenses. However, if you have an expense for something that is used partly for business and partly for personal purposes, divide the total cost between the business and personal parts. You can deduct the business part. For example, if you borrow money and use 70% of it for business and the other 30% for a family vacation, you can deduct 70% of the interest as a business expense. The remaining 30% is personal interest and is not deductible. Refer to chapter 4 of Publication 535, Business Expenses, for information on deducting interest and the allocation rules. (https://www.irs.gov/businesses/small-businesses-self-employed/deducting-business-expenses) So, PROBABLY, you could add up all the charges you made on the card, figure out how much was for business and how much for personal, calculate the business percentage, and then deduct this percentage of the service fees. If the amount involved is not trivial, you might want to talk to an accountant or a lawyer. If you had a CC issuer that allowed you to do bill-pay this way, I suspect the payment would be considered a cash advance that will trigger a fee and a pretty egregious cash advance specific interest rate.  It's not normal for a credit payment portal to accept a credit card as payment. If you were able to do this as a balance transfer, again there would be fees to transfer the balance and you would not earn any rewards from the transferred balance.  I think it's important to note that cash back benefits are effectively paid by merchant fees.  You make a $100 charge, the merchant pays about $2.50 in transaction fee, you're credited with about $1 of cash back (or points or whatever).  Absent a merchant transaction and the associated fee there's no pot of money from which to apply cash back rewards. Cash-back also lets the store turn hard currency into an electronic transfer or check, which reduces the hassle/risk of hauling bagfulls of cash to the bank. (The smaller stores I've spoken to have called this out as a major advantage of plastic over either cash or checks. I'm assuming that the problem scales with number and size of transactions.) Think about the credit card business model... they have two revenue generators: interest and fees from borrowers and commissions and fees to merchants. The key to a successful credit card is to both sign up lots of borrowers AND lots of merchants. Credit card fortunes have improved dramatically since the 1990's when formerly off-limits merchants like grocery stores began to accept cards. So when a credit card lets you just pull cash out of any ATM, there are a few costs they need to account for when pricing the cost for such a service: Credit card banks have managed to make cash advances both a profit center and a self-serving perk. Knowing that you can always draw upon your credit line for an emergency when cash is necessary makes you less likely to actually carry cash and more likely to just rely on your credit card. How would you respond to these cases: Limited card options - If someone has a bad credit record the cards available may only be those with an annual fee.  Not everyone will have your credit record and thus access to the cards you have. Some annual fees may be waived in some cases - Thus, someone may have a card with a fee that could be waived if enough transactions are done on the card.  Thus, if someone gives enough business to the credit card company, they will waive the fee. On the point of the rewards, if the card is from a specific retailer, there could be a 10% discount for using that card and if the person purchases more than a couple thousand dollars' worth from that store this is a savings of $200 from the retail prices compared to what would happen in other cases that more than offsets the annual fee.  If someone likes to be a handyman and visits Home Depot often there may be programs to give rewards in this case. Credit cards can be useful for doing on-line purchases, flight reservations, rental cars and a few other purchases that to with cash or debit can be difficult if not close to impossible. Some airline cards have a fee, but presumably the perks provide a benefit that outweigh that fee over the year. I'm thinking of the Citibank cards tied to American Airlines, first year free, then an $85 fee. Everyone else seems to have focused (rightly so) on the negatives of credit cards (high interest rates) and why it is important to pay them off before interest starts accruing. Only Marin's answer briefly touched on rewards.  To me, this is the real purpose of credit cards in today's age.  Most good rewards cards can get you anywhere from 1-2% cash back on ALL purchases, and sometimes more on other categories.  Again, assuming you can pay the balance in full each month, and you are good at budgeting money, using a credit card is an easy way to basically discount 1-2% of all of the spending you put on your card.  AGAIN - this only works to your advantage if you pay off the credit card in full; using the above example of 20% interest, that's about 1.6% interest if the interest compounds monthly, which wipes out your return on rewards if you just go one month without paying off the balance. "in theory, yes. in practice, no. largely because merchants pay a fee to process credit card transactions which normally exceeds the cash back you can get. i tried this with square, since their vendor fee was 2.75%, and i got 5% back on restaurants.  however, even though i registered with square as a restaurant, transactions were categorized as ""other services"" or something, so i only got 1% back and lost 1.75% net. moreover, if you did find a card/processor combination that left you with a net gain, they would eventually catch on and charge you with some sort of fraud.  i wasn't worried about it with the square experiment because it was only 1$, but if you tried to do this with large sums, a human would catch you. and if it was enough money to matter, there would be a lawsuit. if you were really unlucky, you might get charged with some terrorism crap like ""structuring"" deposits."