At a Glance

When tax season rolls around, many individuals find themselves exploring various payment options. One increasingly popular method is paying taxes with a credit card. But is this a smart financial move? Let’s delve into the ins and outs of paying taxes with a credit card, covering the process, costs, pros, cons, and essential tips to make an informed decision. Read on to confidently navigate the world of tax payments and credit cards.

In this article, you’ll learn:



The average tax liability for those making more than $50,000 per year but less than $75,000. This income bracket was the most common in 2020 — more than 22.6 million Americans filed taxes with this adjusted gross income.

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Can you pay income tax with a credit card?

Before we dive into the details, let’s address the fundamental question: Can you pay your income tax with a credit card? The answer is yes, but it’s essential to understand how the process works and the implications it may have on your financial well-being.

How to pay tax with a credit card?

Paying your taxes with a credit card can be a straightforward process. Most tax payment platforms, including the IRS’s official website, offer credit card payment options. To use this method, you’ll need to provide your card information, including the card number, expiration date, and security code. Double-check your entries to ensure accuracy.

Cost to pay tax with credit card

While paying taxes with a credit card may seem convenient, it’s not entirely cost-free. Credit card companies typically charge a convenience fee for processing tax payments. This fee is usually a percentage of the tax amount, making it crucial to factor in this additional cost when deciding whether to use your credit card.

Pros and cons of paying taxes with a credit card


Sign-up bonus: One of the most enticing benefits of using a credit card to pay taxes is the potential to earn a sign-up bonus. Many credit cards offer generous rewards, such as cashback or travel points, when you reach a specific spending threshold within a specified timeframe. Paying your taxes with a new credit card could help you achieve this threshold and reap the rewards.

Convenience: Using a credit card for tax payments is incredibly convenient. It allows you to manage your finances efficiently and avoid potential cash flow issues arising from paying a lump sum in taxes.

More time to pay: Credit cards provide a grace period, usually around 21-25 days, during which you can pay your balance without incurring interest charges. This additional time can be valuable if you need breathing room to gather funds to cover your tax bill.


Convenience fees: The most significant drawback of paying taxes with a credit card is the convenience fee imposed by card issuers. These fees can range from 1.87% to 1.99% of the payment amount, making it a costly choice compared to other payment methods.

Credit impact: Paying taxes with a credit card may temporarily affect your credit utilization ratio, potentially decreasing your credit score. It’s crucial to monitor your credit and ensure that the benefits outweigh any potential negative impacts.

High interest: If you can’t pay off your credit card balance promptly, you’ll accrue interest charges, which can be significantly higher than other forms of debt. This can add substantial costs to your tax payment in the long run.

Few rewards: Not all credit cards offer rewards or benefits that justify the convenience fee. Before choosing this method, evaluate whether your card’s rewards outweigh the costs.

Tips for managing tax payment with card

1. Use a Balance transfer card

If you anticipate carrying a balance, consider using a credit card with a 0% introductory APR offer for balance transfers. This can help you avoid accruing interest on your tax payment for an extended period.

Compare: Balance Transfer Credit Cards

2. Keep track of your rewards

Stay vigilant about the rewards offered by your credit card. Ensure they align with your spending habits and financial goals, making the convenience fee worthwhile.

3. Avoid interest

Paying your credit card balance in full before the due date is crucial to avoid high-interest charges. Plan your finances accordingly to meet this deadline.

4. Check your credit limit

Ensure your credit card has a sufficient credit limit to cover your tax payment. If necessary, contact your card issuer to request a temporary limit increase.

Other ways to pay tax with credit card

IRS payment plan

The IRS offers payment plans that allow you to pay your tax debt over time. These plans typically have lower interest rates and may be a better option for those who cannot immediately pay their taxes in full.

Convenience check

Some credit card issuers provide convenience checks that can be used to pay taxes without incurring a convenience fee. However, these checks often come with their terms and conditions, so read the fine print.


Paying taxes with a credit card can be beneficial if you can take advantage of sign-up bonuses and manage your finances responsibly. However, it’s essential to weigh the costs and potential credit impact.

Choosing between paying with a credit card and setting up a payment plan depends on your financial situation. A payment plan may be more manageable for those who cannot pay their taxes in full immediately.

No, paying taxes with a credit card is not considered a cash advance. It is a standard credit card transaction, subject to the associated fees and interest rates.

Opening a new credit card solely for tax payments may not be advisable unless you can benefit from a valuable sign-up bonus and manage the card responsibly.

No, paying taxes with a credit card typically incurs a convenience fee, making it more expensive than other payment methods. Be sure to factor in this cost when deciding on your payment method.