Credit cards are a convenient way to pay taxes, but you can still earn some rewards along the way. Paying taxes with a credit card could potentially give you a breathing room if you don’t have the funds to pay taxes by the due date.
Still, there is one major hurdle that is inevitable when paying taxes with a credit card. Here are some of the best options for using your credit card to pay taxes while reducing the bottom surface.
Top credit cards to pay taxes
Perfect for intro APR
19.24%, 24.24%, or 29.24% Variable APR
Great for winning sign-up bonuses
19.99% – 28.24% Variable
Perfect for travel
19.99% – 29.24% (variable)
Perfect for first year value
18.24% – 27.24% Variation APR
Ideal for business tax
17.49% – 27.49% Variable
Compare the best credit cards to pay taxes
Below are some of the biggest options for paying taxes with a credit card, depending on your overall financial needs.
| Card name | It’s perfect for | Highlights | Annual fees | Recommended Credit Score |
|---|---|---|---|---|
| Wells FargoActiveCash® Card | Intro April |
|
$0 | 670 – 850 |
| Chase SapphirePreferred® Card | Sign Up Bonus |
|
$95 | 670 – 850 |
| Capital One Venture X Rewards Credit Card | trip |
|
$395 (See Fees and Fees) | 740 – 850 |
| Discover IT® Miles | The value of the first year |
|
$0 | 670 – 850 |
| American Express Blue Business Cash™ Card | Business Tax |
|
There is no annual fee | It’s good, it’s great |
How to Choose the Best Credit Card to Pay Taxes
The best credit cards for paying taxes will depend on the advantages of the card you want to open an account. In many cases, you can stack different incentives to provide a great initial value, or choose a card that offers more benefits over the long term. Below are some of the main considerations when choosing to pay taxes with a credit card.
Reward
You can earn rewards on tax bill spending, but it may not count in the bonus category on your card. That means you only earn 1%. If earning rewards is your main focus, we recommend choosing a high rate card for the category you spend on all your purchases regularly, like any of us The best flat cashback card.
It is also important to note that the rewards you earn are likely to be less than the fees you owe to use your credit card for tax payments. For example, if you need to pay 3% for your processing fee, but only earn 2% cashback at the time of your purchase, you’re losing out on that transaction. This is why you want cards that reward you in many categories. Remuneration should be part of a major goal of earning sign-up bonuses, maximizing rewards, or taking advantage of the intro APR offers, rather than a major consideration for paying tax bills.
Possible sign-up bonuses
If your taxes are high enough, it will help you win a credit card welcome bonus. some Best credit card offers It comes with a sign-up bonus that will bring you a lot of revenue on the spending you need. Your tax bill may knock on the full amount you need on a single purchase and will provide you with a prompt return.
if you want to Apply for a new credit card For tax expenditures, consider the size of your invoice and minimum spending requirements for welcoming offers. You can consider the value of the welcome offer and returns from the rewards you earn for what you may pay at the fee.
Start your taxes early to advance your sign-up bonus. Many cards process applications quickly, but it can still take several days and you may have to wait for the physical card to be present before using it.
Intro APR Offer
One approach to tackling a significant tax bill is Intro APR Offer. This gives you space to pay back tax bills that you may not have any immediate space. Remember that 0% APR offers have an end date. Therefore, if you are unable to pay your invoices by the end of the introductory period, you can repay your debts at the normal variable interest rate on your card.
If you can find cards with solid intro APR offers and welcome bonuses at the time of purchase, you will get the best in both worlds. You will earn rewards for bill payments, earn great profits through welcome offers and have time to pay bills if necessary.
Please note that this will only work for two years depending on when you apply for your card. Once your APR offer is over, keep another solution in mind.
Payment in installments
Another benefit of paying taxes with a credit card is that you can split the tax amount across different cards. If your invoice is high enough, this will allow you to win or tackle multiple welcoming offers. If you stack it with the rewards you earn on these cards, you can earn a significant profit.
Please know there is Payment Frequency Limit About each processor and payment type. Usually, each processor allows for two payments, but there are several variations.
Disadvantages of paying taxes with credit cards
While there are several advantages to paying taxes with a credit card, it has important drawbacks, such as processing fees and potential interest.
Processing fee
If you use a credit card for convenience, you will need to pay the processing fee. This allows you to add the value you gain from the card and quickly erase it. The following chart shows the options for paying federal tax with a credit card Internal Revenue Service (IRS)Furthermore, the fees charged by each company:
Credit card extras for state taxes vary, but you pay between 1.82% and 1.98% to pay federal tax bills with your credit card. Whether your chosen payment processor or credit card, you need to make sure it’s more valuable than paying for your fee. Bank Rate Points and miles ratings It helps you identify the actual value of your revenue and deduct what you owed in your processing fee.
Impact on credit score
a Large purchasestax payments, etc. can affect your credit score. In many cases, by increasing credit usage. Even if it can I’ll pay the balance back Soon, your score can drop temporarily for a short period of time.
you Balanceyou can pay a considerable interest fee and make the tax bill quite expensive. If your tax bill is higher than you can afford, you’ll want to Plan smartly Pay off your credit card debt and avoid paying extra interest in addition to a large tax bill.
What’s next?
Enter your basics into Bankrate’s pre-qualification tool CardMatch™ to find the right card for your needs. For more insights, our Spender-type tools can point you in the right direction.
Conclusion
Paying taxes with a credit card can be rewarding, but you need to make sure your card offers a large number of perks and perks outside of tax payments. It won’t boost your tax payouts, so whether you’re getting a sign-up bonus or having an intro APR offer to spread your payments is important to your payment needs.
