You might have heard stories around the water cooler about your colleagues using their company credit card for personal use. But is it true that most people are doing this? In this article, we delve into the topic of how common this practice is and the potential consequences (not to mention a little personal finance advice). You might just be surprised by what we uncover!
You Believe Most People Use Their Company Credit Cards For Personal Use Table of Contents
The Reality of Company Credit Card Use
Research shows mixed findings on whether most people are actually guilty of using their company credit cards for personal purchases. In one study, 29% of employees admitted to making personal purchases on a corporate card, while another survey claimed that 50% of employees had used a company card for non-work expenses.
Regardless of the exact numbers, it's clear that some professionals are using their company credit cards in ways they probably shouldn't.
Why Employees Use Their Company Credit Card for Personal Expenses
There are various reasons why one might be tempted to use their company card for non-work-related expenses, including:
- Convenience: It's simply easier to use a card already in one's wallet than to pull out a personal card.
- Emergency: In some cases, employees may genuinely believe they have no other option but to use their company card during an emergency.
- Racking up rewards points: Many corporate cards come with enticing rewards programs, and some employees might succumb to the temptation of using these cards to earn more points for their own use.
Potential Consequences of Using a Company Card for Personal Expenses
There can be serious consequences for employees who use their company-issued credit cards for personal expenses, including:
- Loss of job: Misusing a company card can result in termination if the employee's actions are discovered.
- Damage to professional reputation: Being caught misusing company resources could tarnish one's professional reputation, making it difficult to find a job in the future.
- Legal trouble: In some instances, misusing a company card could be considered a form of fraud, leading to potential legal issues.
Personal Finance Tips to Resist the Temptation
Here are a few suggestions for how to avoid using your company card for personal expenses:
- Keep personal and company cards separate: Store your company card and personal cards in different wallets or compartments to avoid accidentally mixing them up.
- Create a budget: Understanding your personal financial situation and creating a budget online can help you avoid situations where you feel forced to use your company card for personal expenses.
- Build an emergency fund: Save a small amount of money from each paycheck to build an emergency fund - this way, you won't have to rely on your company card in a tight situation.
- Resist the temptation of rewards points: If you find yourself tempted by the promise of rewards points, remind yourself of the potential consequences and consider using your own credit card to gain rewards responsibly.
You Believe Most People Use Their Company Credit Cards For Personal Use Example:
Imagine Jane works in marketing and often uses her company credit card for business lunches. When her car breaks down, she is faced with a costly repair bill. Since her personal credit card is maxed out, Jane decides to use her company card to pay for the repair. She plans to repay the amount before her employer notices the charge but struggles financially and isn't able to do so.
When the company's accounting department notices the unusual charge, they launch an investigation. Having violated company policy, Jane faces termination and a tarnished professional reputation. If she had an emergency fund or separate personal credit card, she may have avoided this situation.
So there you have it! While it may seem that many people use their company credit cards for personal use, it's crucial to understand the potential consequences of this practice. Instead, focus on better managing your personal finances and resist the temptation to rely on your company card. And hey, if you found this article helpful, why not share it with your friends or explore more guides on Flik Eco? Together, we can create a more financially savvy generation.