Tax season is coming to a close. Many people owe taxes and hold out as long as possible before paying up. While it may be tempting to just put your balance due on a credit card, it could come with a hefty fee. As the following article points out, the credit card companies often charge a fee of 3 or 4 percent just for using a credit card to pay your taxes.
So if you owed $10,000.00 and paid with a credit card, you would be paying an additional $300 or $400 as a convenience fee. And if you carry that balance without paying it off, you will also be paying interest on top of that. I know it may be a convenient way to just pay it all at once with your credit card, but we rarely encourage incurring more debt to get out of another debt. Especially at a high price. The IRS does offer monthly installments, which you might want to explore as an alternative to additional credit card debt. Make wise choices and seek the help of a professional so maybe next year you can minimize taxes paid or, even better, elect to have a tax return deposited directly into your account.
Kevin Fallon McCarthy
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