Canadian Small Business Credit Card Spending Rises 18%, Intuit Reports
Intuit's QuickBooks Small Business Index Annual Report finds Canadian small businesses increased credit card spending 18% as inflation and funding challeng
Canadian small businesses are leaning on credit cards to bridge widening gaps between costs and available funding, according to Intuit’s latest QuickBooks Small Business Index Annual Report. The report points to an 18% rise in credit card spending among Canadian small businesses, a trend shaped by persistent inflation and tighter access to conventional financing.
What the Report Found
The QuickBooks Small Business Index Annual Report highlights how Canadian small businesses are adjusting their spending behavior in response to economic pressure. With inflation driving up the cost of goods, services, and operations, many owners are turning to credit cards as a flexible — if more expensive — way to keep operations running. The 18% increase underscores how deeply credit reliance has grown when traditional funding channels become harder to access.
Why Credit Card Use Is Climbing
When bank loans, lines of credit, and other financing options are difficult to secure or too slow to arrange, credit cards offer immediate liquidity. For small businesses already operating on thin margins, this can mean covering inventory, payroll, or vendor payments with borrowed funds that carry higher interest rates than conventional loans. The report’s findings suggest that inflation is compounding the problem: as prices rise, the balances carried month to month grow larger, increasing the cost of servicing that debt.
What This Means for Bookkeeping
A surge in credit card transactions creates more entries to categorize, reconcile, and track — and more room for errors if the workflow is not tightly managed. For accountants and bookkeepers supporting Canadian clients, this trend makes consistent reconciliation and clear expense classification especially important. Properly categorizing credit card spending in QuickBooks Online helps ensure that interest charges, finance fees, and operating expenses are recorded accurately, which in turn gives business owners a clearer picture of their true cost of carrying debt.
Practical Next Steps
Businesses feeling the squeeze can benefit from reviewing credit card statements alongside their bookkeeping records to identify which charges are recurring operational costs versus one-time purchases. Setting up rules for automatic categorization, scheduling regular reconciliation, and tracking interest as a separate line item can help owners see the real cost of credit reliance and make more informed decisions about when to seek lower-cost financing alternatives.