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Are credit card fees tax-deductible?

Get tax deduction on some credit card fees.

CRA tax rules allow you to get a tax deduction for credit card fees, including the annual fee, cash advance fees, foreign transaction fees and balance transfer fees. Unfortunately, this doesn’t apply to all credit cards.

Can I tax deduct credit card fees?

If you use your credit card for personal expenses, your card fees aren’t tax-deductible. But if you use your credit card for business expenses — you can get tax deductions on most of your credit card fees. That’s because you can generally deduct any necessary expense used for earning income.

The following are credit card fees that may be tax-deductible, but check with a certified tax consultant to verify what is deductible for your business:

  • Annual fee
  • Foreign transaction fee
  • Late payment fee
  • Overdraft fees
  • Cash advance fees
  • Balance transfer fees
  • Most other credit card fees

Note: If your business accepts credit card payments, you can get a tax deduction for fees charged by your payment processor.

Criteria for deducting credit card fees

To deduct your credit card fees, you need to:

  • Have a business. A sole proprietorship or a corporation are both eligible to get tax deductions on your business-related credit card purchases.
  • Separate your business expenses. If you use your personal credit card for business purchases, you can’t deduct your entire card’s annual fee because you’ll need to calculate how much money you spend on business purchases as opposed to your personal purchases. To simplify bookkeeping, use a business credit card exclusively for your business purchases.
  • Keep clear records. This is important, especially if you mix personal and business purchases. With good record-keeping, you can easily find which fees were incurred on your business-related purchases.

Compare business credit cards

The best way to separate your business from personal expenses is to use a business credit card. You can deduct the card’s annual fee — and apply for a card with a higher annual fee that yields greater rewards.

Name Product Purchase Interest Rate Cash Advance Rate Annual Fee Minimum Income Welcome Offer
American Express Business Edge Card
19.99%
21.99%
$99
N/A
Earn up to 57,000 Membership Rewards points in your first year. Earn 45,000 Welcome Bonus points when you charge $5,000 in purchases to your Card in your first three months, and earn 1,000 Membership Rewards points each month (a total of 12,000 annually) when you spend a minimum of $3,000 on eligible purchases.
American Express Aeroplan Business Reserve Card
16.99%
21.99%
$599
N/A
Earn up to 90,000 Aeroplan points and a bonus Buddy Pass.
BMO Cashback Business Mastercard
19.99%
22.99%
$0
N/A
Get 10% cash back on gas, office supplies, cell phone bills and internet bills for 3 months.
BMO World Elite Business Mastercard
17.99%
22.99%
$0 annual fee for the first year ($149 thereafter)
N/A
Get 50,000 points as a welcome bonus when you spend $5,000 in your first 3 months.
BMO Air Miles No-Fee Business Mastercard
19.99%
22.99%
$0
N/A
Get 1,000 AIR MILES Bonus Miles (over $100 towards your purchases with AIR MILES Cash).
BMO AIR MILES World Elite Business Mastercard
19.99%
22.99%
$0 annual fee for the first year ($149 thereafter)
N/A
American Express AIR MILES for Business Card
N/A
N/A
$180
N/A
Earn a Welcome Bonus of 2,000 AIR MILES when you spend at least $5,000 on eligible purchases within the first three months
Business Platinum Card from American Express
N/A
N/A
$499
N/A
Earn a Welcome Bonus of up to 100,000 Membership Rewards points ($1,000 in statement credits that you can reinvest into your business).
Marriott Bonvoy Business American Express Card
19.99%
21.99%
$150
N/A
Earn a Welcome Bonus of up to 85,000 Marriott Bonvoy points. Plus, earn 5 points for every $1 spent on eligible gas, dining & travel (excluding lodging) for the first 3 months.
American Express Business Gold Rewards Card
N/A
N/A
$199
N/A
Earn a Welcome Bonus of up to 110,000 Membership Rewards points. If redeemed for statement credit, this is $1,100 that you can reinvest in your business.
American Express AIR MILES Gold Business Card
19.99%
21.99%
$0
N/A
Earn a Welcome Bonus of 150 AIR MILES when you spend at least $1,000 in eligible purchases within the first three months
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Compare up to 4 providers

Bottom line

Most credit card fees incurred on your business-related purchases are tax-deductible. This includes the annual fee, cash advance fees, foreign transaction fees, balance transfer fees and most other credit card fees.

But to simplify accounting and to easily calculate your tax deduction, consider applying for a business credit card.

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