There are many differnt views when it comes to the pay taxes with a credit card subject, providing many reasons whther or not it is a good idea for a credit card holder. If you are looking to pay taxes with a credit card and are looking if it is a good way to go, or if you don’t know much about the subject and are looking to educate yourself for possible future use, this article will be a remedy to your questions. The following infromation will provide you with the main overview of what using a credit card to pay taxes encompasses, as well as giving your the pros and cons that will help you make your descision to whether you want to pay taxes with a credit card.
Pay Taxes With a Credit Card – PROS and CONS
A short definition on paying your taxes with a credit card is that when you don’t have enough cashflow to pay your taxes for whatever reason, you put the debt on your credit card, instead of paying for it with cash. The next section will provide you the positives and negatives if of paying your taxes with a credit card.
There are some benefits of paying your taxes with a credit card, but unfortunately this section doesn’t go on for to long as the positive side of this subject is pretty dismal. Here are a couple benefits:
- The first benefit when deciding to pay taxes with a credit card is that you will avoid all the penalties and fees that you will have to suffer if you don’t pay it. By paying these penalties, you will only be stuck with your minimum fee instead of minimum fees as well as penalties and fees that are imposed on you when you don’t pay your taxes.
- Paying taxes with a card allows you to have more time to pay off your tax bill compared to the more traditional way of paying the debt off.
Although there are many credit card companies promoting the option to pay taxes with a credit card and how great it is, its not all what it seems at first glance, here is a list of the negative aspects of paying with a credit card.
- This method of payment presents the chance that your reputation with your credit card company will be ruined because they won’t trust you to do business with if you can’t make the payments to them.
- IF you choose to pay taxes with a credit card, not only will you have to pay off the grand total of whatever you owe in taxes, you will have to pay interest on those payments that usually come with a very high interest rate. This is essentially throwing money away.
- Bankruptcy is not even an option with the IRS. You will have to make the payment no matter what.
- The interest rate is very high for the processing transaction along, as high as 2.49 percent.
Pay Taxes With A Credit Card – Conclusion
As you can see the negative part of paying taxes with your card really outweigh the benefits. With this information above, it really shows that if you pay your taxes with a credit card, you will be paying in more ways than one, and is not a very good option to consider when looking for other ways out of a tax payment.