Business Glossary

interest paid on consumer loans. Consumer interest is paid on credit cards, bank lines of credit, retail purchases, car and boat loans, and educational loans. Since the end of 1991, such interest is no longer deductible for tax purposes, based on provisions of the tax reform act of 1986 . That tax law distinguished nondeductible consumer interest from other forms of interest which can be deductible, including business interest, investment interest, and mortgage-related interest.

finance charge on bank card and retail credit card purchases, cash advances, educational loans, and other types of consumer credit. Since 1991, consumer interest is no longer deductible for tax purposes. Contrast with mortgage-related interest and business interest, which remain tax deductible.

interest incurred on personal debt and consumer credit; not deductible after 1990.