Owe Uncle Sam on taxes? Paying with your credit card might help you rack up perks — if you do it right.
The IRS takes checks and electronic fund transfers. The agency will also let you pay with plastic for a fee through a payment processing company.
Be aware that in general, paying your taxes with a credit card can damage your finances. The average interest rate on a credit card currently is at a record-high of 17.64 percent, according to CreditCards.com.
“Paying your taxes with a credit card is not free,” said certified financial planner David Mendels, director of planning at Creative Financial Concepts in New York.
On the other hand, if you have a rewards card and if you have enough money in the bank to pay the bill, you might want to weigh the pros and cons of using it to pay the IRS.
“We all love credit card rewards,” said Ted Rossman, industry analyst at CreditCards.com. “Everyone is enamored with cash back and free travel.”