Comments on: Don’t Pay Your Taxes With Your Credit Card!

By: Ray

Ray — Mon, 14 Apr 2008 17:17:24 +0000

Easy Money, I used my Citi CashRewards card which pays you back 5% for the first 3 months on anything you spend it on. Let’s see 2.49% from 5% = 2.51% profit.

I’ll pay off my credit card like I do every month and I just made 2.51% for using my credit card. I love how people are so negative with the possible negative events which could happen.

Obviously, If I don’t pay my credit card then I would be charged interest… really? I had no idea that would happen. – This is no different than anything else in life. If you know the rules and you pay your bills and read the fine print you will be fine. If you can’t function outside the box, then don’t use your credit card. I know how to use my credit and milk them for all the free rewards and 0% money they will throw at me.

This is a great deal if you can make more than the 2.49% fee, otherwise don’t use your CC.

By: The Sim

The Sim — Mon, 14 Apr 2008 17:13:09 +0000

ps, sometimes you even get cashback rewards on purchases even for the 0% intro rate cards, so this can be an even larger incentive.

By: The Sim

The Sim — Mon, 14 Apr 2008 17:10:41 +0000

I paid my taxes last year with a 0% purchase credit card, and intend to do it again this year. I have a card with sufficient line of credit with 14 months of 0% interest introductory rate remaining. I will pay minimum payments each month, keeping the cash in an online savings account earning ~3%, then pay it off in one lump sum at the end (it was better last year when you could get 4.5%). After taxes on the earned interest (!), it works out to pretty much 0 gain or loss for paying your taxes this way, but the benefit of not having to actually pay out most of the cash for an additional year (always nice to have cash on hand in case of emergency, if it doesn’t cost you anything). To my knowledge, these transactions are considered ordinary purchase transactions by the credit card companies (this was my experience last year), and will be treated as such on your bill. The extra 2.49% is simply included as part of the purchase price by the payment processor.

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