April 10, 2012

Don’t Use Plastic To Pay Uncle Sam!

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.

https://www.wboc.com/story/17279930/paying-tax-bill-with-credit-card-a-bad-idea

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.

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