Is Paying Taxes with your Credit Card Rewarding?

MoBi · U POSTER Joined: 08 Feb 2008 Posts: 38

Hi guys,
I've heard that some people paying their taxes by using their rewards credit cards. So, you can pay off your taxes and get points from your reward credit card. Is it really rewarding? Is there any fees for paying taxes with a credit card?
Rolling Eyes

Claudia · U POSTER Joined: 11 Feb 2008 Posts: 40

i've heard something about that. but wouldn't it be treated as cash advance? if so then it may not be a good idea 'cause some banks will charge you for that. but i'd like to know more about it, may be a good option if we can make some bonus points on this deal!

malina · Joined: 04 Feb 2008 Posts: 25

Hi there,
I am familiar with this crap.
To get rewards points and air miles by charging your taxes on your reward credit card is rarely as rewarding as you might think.
you’ll pay for the ease of paying your taxes by credit card with a 2.49% convenience fee. This fee isn’t charged by the Internal Revenue Service. It’s charged by credit card service providers Cool

Let’s say your card pays you 1% cash rebate for every dollar you spend with the card. By charging your $2,000 tax bill, you’d earn $20 cash back, but that’s more than offset by the $49.80 convenience fee.
Paying an extra $49.80 to earn $20 doesn’t make a lot of sense does it?

Claudia · U POSTER Joined: 11 Feb 2008 Posts: 40

aren't there credit cards with free cash advance? for at least 3-6 months? those would be a nice thing to have if you end up using your credit card to pay taxes. now, i'm thinking, a friend of mine used a credit card to pay his taxes last year. i mosdef think he knows about them. i'll see what he says.

cardexpert · Joined: 04 Feb 2008 Posts: 21

Good idea!
Your best bet is to charge your taxes to a rewards credit card with a 0% introductory APR for new purchases. The longer this teaser rate lasts the better – a 0% offer for a year or more would be ideal.

Of course, the absolute best strategy is to pay off your credit card balance straightaway and avoid all finance charges. Also, bear in mind the IRS does offer various other payment options that may be more appealing.
Find the best way to pay less taxes!

HSBC WEEKEND CARD

Intro APR:
0% on B/T
Reg APR:
11.49%
Annual Fee:
$0

MoBi · U POSTER Joined: 08 Feb 2008 Posts: 38

tonymaffoy · Joined: 02 Dec 2008 Posts: 3

you can not get rewarding points by paying taxes with the help of credit cards.

admin · Site Admin Joined: 03 Oct 2007 Posts: 184

You are probably right. It should be considered cash advance, rather than a purchase (which would be the case for reward points). Let me check my resources and get back with you on that.