Risks Of Credit Card Financing

Credit cards are convenient but dangerous for small businesses. High interest and lack of structure create debt traps and CRA risk. Mackisen CPA Auditors Montreal replaces risky credit card financing with CPA-certified, compliant funding strategies.

Legal and Regulatory Framework
Bank Act (Canada) Section 462: Regulates interest rates and lending disclosures.
Income Tax Act (Canada) Section 20(1)(c): Permits deduction on verified business card interest.
Taxation Act (Quebec) Section 34: Requires detailed recordkeeping for credit-based transactions.
CPA Canada Handbook Section 3856: Covers liability recognition.
Consumer Protection Act (Quebec): Regulates small business credit agreements.

Key Court Decisions
Beaudoin v. The Queen (2020): Disallowed deductions for mixed card usage.
Lincora Group v. Quebec (2019): Penalized unverified credit card interest.
Simard Beaudry Construction v. Canada (2019): Approved CPA-tracked transactions.
Tremblay Holdings v. The Queen (2021): Recognized CPA oversight in debt audits.
Royal Bank v. Canada (2019): Validated accurate CPA-audited credit summaries.

Why CRA Targets Credit Card Expenses
CRA audits card statements to ensure business-only use. Unverified or personal charges trigger reassessment. Mackisen CPA Auditors Montreal maintains separate records for business and personal cards.

Mackisen Strategy
Credit Separation — Designate business-only accounts.
Expense Verification — Match receipts with card transactions.
Debt Restructuring — Replace high-interest cards with structured loans.
Interest Reporting — Deduct business interest accurately.
CPA Oversight — Prepare card reports for CRA verification.

Powering Client Needs and Financial Control
A Montreal bakery reduced debt 40% by replacing cards with loans. A Quebec retailer increased tax deductions through CPA verification. A Toronto design firm improved credit through payment restructuring.
How Mackisen Clients Benefit

• Lower debt and interest rates

• Full CRA compliance

• Improved credit scores

• CPA-certified reporting

Common Questions
Is credit card interest deductible? Yes, for business use.
Can CRA audit card expenses? Always.
Should I mix personal charges? Never.
Can Mackisen manage refinancing? Yes.
Do credit cards hurt business credit? Excessive usage does.

Why Mackisen
Mackisen CPA Auditors Montreal protects your business from credit misuse. We build funding systems that are strategic, compliant, and profitable.