Finder makes money from featured partners, but editorial opinions are our own. Advertiser Disclosure

Is credit card interest tax-deductible?

Get a tax deduction on interest accrued on some purchases.

Let’s face it: Tax season isn’t the best. But there are certain things you can do to make it a bit more bearable — like learning how to save some money through deductions.

For example, deducting tax interest accrued on credit card purchases can help reduce the taxes you owe. However, this only works for some purchases.

Can I deduct credit card interest?

If you accrued credit card interest on personal expenses, your interest isn’t tax-deductible. But interest accrued on business expenses is tax-deductible. This often includes expenses for businesses, contractors and other self-employed individuals.

Criteria for deducting credit card interest

To deduct credit card interest on business purchases, you must fit these criteria:

  • You are legally liable for the credit card debt
  • You and the lender have a creditor-debtor relationship
  • You intend for the debt to be repaid

Can I use a personal credit card for business purchases and get a tax deduction?

Yes, but you’ll need to calculate the amount of interest accrued to your business purchases. Since you’ll likely have both personal and business purchases on your credit card, calculating interest could be a hassle.

Why can’t I deduct credit card interest on a personal card?

In 1986, US President Ronald Reagan signed the Tax Reform Act of 1986, which was designed to simplify the federal income tax code by removing tax deductions and tax shelters. Credit card interest on personal expenses was made ineligible for tax deductions.

Are credit card fees tax-deductible?

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. The following fees are tax-deductible:

  • 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.

Paying your taxes electronically can come with a 2% or 3% processing fee. This fee is tax-deductible for both personal and business credit cards.

Criteria for deducting credit card fees

To deduct your credit card fees, you need to:

  • Have a business. A sole proprietorship, a corporation or a limited liability company (LLC) are all eligible to get tax deduction 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 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

Separating your business and personal expenses is one of the best ways to simplify the accounting process for tax deductions. If you don’t have a business credit card yet, consider applying for one.

1 - 3 of 13
Name Product Filter values Rewards Purchase APR Annual fee
Corpay Mastercard®
1.5% on qualifying spend
The card and payment platform that lets you earn up to 1.5% on all qualifying expenses when you pay your business bills through Corpay One.
Capital on Tap Business Credit Card
1.5% cashback on all purchases
24.99% variable
Earn 1.5% back on all purchases and invest in your business.
Ramp Visa® Commercial Card
1.5% cashback on all purchases
Replace expense reports with unlimited virtual and physical cards. Automate your accounting, lower your bills, and earn 1.5% cash back on everything.

Compare up to 4 providers

Bottom line

Interest accrued on your business purchases — whether it be on a personal or a business credit card — is tax-deductible. If you use a personal credit card for your business expenses, you’ll need to calculate the interest on your business purchases yourself.

To simplify the process, consider applying for a business credit card and separate your personal and business expenses.

Frequently asked questions

When can I deduct credit card interest?

Deduct your credit card interest in the year you pay it, not when the purchase was made. For example, if you make a business purchase in 2022 and you use a 0% intro APR period for 12 months, you will start to accrue interest in 2023 on any unpaid balance. In this scenario, you can deduct the interest you paid in 2023.

Are PayPal fees tax-deductible?

If your business is accepting PayPal purchases, your PayPal fees are tax-deductible.

More guides on Finder

Ask an Expert

You are about to post a question on

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked provides guides and information on a range of products and services. Because our content is not financial advice, we suggest talking with a professional before you make any decision.

By submitting your comment or question, you agree to our Privacy and Cookies Policy and Terms of Use.

Questions and responses on are not provided, paid for or otherwise endorsed by any bank or brand. These banks and brands are not responsible for ensuring that comments are answered or accurate.
Go to site