Try and Make Money While Paying Your Taxes with a Credit Card

When tax time rolls around, we hear the same thing every time: use your credit card to pay your taxes; it's the easiest, simplest way to get things done. But, when thinking about whether or not you want to actually use credit cards to pay your taxes, you need to step back and really consider if there are benefits to it or if you are just going to lose out in the end.

There are two ways that the credit card company wins. The first is if you use your credit card for points and miles, but then forget that there is surcharge which can sometimes be an additional 2.5%. So, assume that you spend $1000 on your taxes. Add in the $25 for the 2.5% and then look at the percentage you're getting for your points or cash back. Probably 1% of whatever you spend. So, you're getting $10 back. What does that mean? You're out $15. The second way is if you don't pay back your credit card immediately. If you pay your taxes with the card and then only pay the minimum, the credit card wins because their profit is incredible.

So, how do you win? Some of the best credit cards out there offer 5% cash back on purchases made in the first month. So, if you were to sign up for one of these and pay your taxes with it, sure, you're paying the 2.5% service fee, but then you're getting 2.5% profit on top of that, so you're up 2.5%. Or, you can sign up for a credit card like st.george credit cards and get discounts at stores if you use it. So long as you use it correctly, it works.

Paying your taxes with a credit card is not a horrible decision, but in the end, it all depends on the type of card you have. Try and make something from the huge purchase. Always look for ways to not only save money, but make a little money back from the credit card companies.