Although a lot of people consider paying their tax bill with a credit card, experts usually advise against it —not only is there a processing fee of nearly 2%, but you'll be charged interest unless you pay the balance in full by the end of your billing cycle.
Financial coach Ashley Patrick, founder of the Budgets Made Easy platform, bucked that conventional wisdom — and said she'd do it again. She used a 0% APR offer on a Bank of America® Customized Cash Rewards card to pay $6,000 in taxes back in 2015.
At the time, Patrick and her husband had some savings, but they didn't want to wipe out their emergency fund. When she received a 0% APR offer from her card issuer, it gave her the chance to pay her taxes interest-free over 18 months.
If you owe the IRS and haven't had time to save, a credit card with an APR intro offer, like the Citi Simplicity® Card or the U.S. Bank Visa® Platinum Card, can be a lifesaver.
The Citi Simplicity® Card may not earn rewards, but it can still save you money due to its amazing intro-APR offers.
If you qualify, you won't pay interest on charges for anywhere from 6 to 21 months. Besides covering large expenses, these cards usually allow you to transfer balances from other cards with higher APRs, enabling you to consolidate credit card debt and get some breathing room to pay down your balance.
Credit cards usually only promote zero-interest offers when you open a new account. Rather than do that, the Patricks used a convenience check from their existing card issuer. Like a 0% APR card, a convenience check lets you pause interest for a set timeframe, usually 6 to 18 months.
Patrick and her husband paid off the balance well before the 18 months were up, though, and then took steps to reduce their reliance on credit cards for major expenses.
"My experience using [my credit card] was pretty easy," Patrick said. It saved her from wiping out her savings or facing IRS penalties for late payment.
"Owing the money on the credit card is what sparked my search for debt pay-off plans," said Patrick, who went on to pay off a $14,000 car loan and $25,000 in student debt. "It was the catalyst that started us on the journey to financial freedom. Not worrying about the next paycheck. Not worrying about if my husband loses his job."
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3 times it makes sense to use a credit card to pay your taxes
You might come out ahead by using a card to pay your tax bill.
1. If you need more time
If you can't pay your tax bill, a credit card with an intro 0% APR period can give you up to two years without interest. The Capital One VentureOne Rewards comes with a 0% intro APR on purchases and balance transfers for 15 months. (18.49%-28.49% variable APR after that.) Plus, there's no annual fee, and users earn 1.25X miles on every purchase. Only go this route if you know you'll be able to pay off the bill before the intro period ends, though.
The Capital One VentureOne Rewards Credit Card earns transferrable miles, which is a stand-out benefit for a no-annual-fee card.
- You can transfer miles to over 15 Capital One partners, including Emirates Skywards, Choice Privileges and Singapore Airlines KrisFlyer
- No annual fee
- Limited bonus spending category that only applies to certain Capital One Travel bookings
- No travel credits and limited travel protections
Highlights
Highlights shown here are provided by the issuer and have not been reviewed by CNBC Select's editorial staff.
- Earn a bonus of 20,000 miles once you spend $500 on purchases within 3 months from account opening, equal to $200 in travel
- $0 annual fee and no foreign transaction fees
- Earn unlimited 1.25X miles on every purchase, every day
- Miles won't expire for the life of the account and there's no limit to how many you can earn
- Earn 5X miles on hotels, vacation rentals and rental cars booked through Capital One Travel
- Use your miles to get reimbursed for any travel purchase—or redeem by booking a trip through Capital One Travel
- Transfer your miles to your choice of 15+ travel loyalty programs
- Enjoy 0% intro APR on purchases and balance transfers for 15 months; 18.49% - 28.49% variable APR after that; balance transfer fee applies
- Top rated mobile app
Balance transfer fee
3% for the first 15 months; 4% at a promotional APR that Capital One may offer you at any other time
Foreign transaction fee
None
2. If you have a rewards credit card with at least 2% cash back
Using a rewards credit card to pay your taxes can yield cash back, points or miles, often enough to offset the processing fees.
If you owe the IRS $1,000 and charge it through Pay 1040, you'll incur a 1.75% fee, which comes to $17.50. If you used ACI, the fee would be 1.85%, or $18.50.
Wells Fargo Active Cash® Card offers unlimited 2% cash back on all purchases, which more than covers that expense. (It will also qualify you for the card's $200 welcome bonus, which requires $500 in purchases in the first three months after opening.)
The Wells Fargo Active Cash® Card is great if you want simplicity thanks to its flat-rate 2% unlimited cash rewards on purchases and $0 annual fee.
- High flat-rate return on purchases
- Intro-APR for purchases and qualifying balance transfers for a year
- No annual fee
- Cell phone protection
- Has a foreign transaction fee
- Limited redemption options unless you pair it with a Wells Fargo card that allows point transfers
Highlights
Highlights shown here are provided by the issuer and have not been reviewed by CNBC Select's editorial staff.
- Apply Now to take advantage of this offer and learn more about product features, terms and conditions.
- Earn a $200 cash rewards bonus after spending $500 in purchases in the first 3 months.
- Earn unlimited 2% cash rewards on purchases.
- 0% intro APR for 12 months from account opening on purchases and qualifying balance transfers. 18.49%, 24.49%, or 28.49% variable APR thereafter; balance transfers made within 120 days qualify for the intro rate and fee of 3% then a BT fee of up to 5%, min: $5.
- $0 annual fee.
- No categories to track or remember and cash rewards don't expire as long as your account remains open.
- Find tickets to top sports and entertainment events, book travel, make dinner reservations and more with your complimentary 24/7 Visa Signature® Concierge.
- Up to $600 of cell phone protection against damage or theft. Subject to a $25 deductible.
Balance Transfer Fee
3% intro for 120 days from account opening, then up to 5%, min: $5
Foreign Transaction Fee
3%
Make sure your card offers at least 2% cash back rewards on all purchases and that you'll be able to pay it off before the end of the billing cycle.
3. If you need to meet spending requirements
Some rewards cards require a minimum spend to trigger a bonus. The Chase Sapphire Reserve® (see rates and fees) has a welcome bonus offer of 150,000 points, but to earn it, you must charge at least $6,000 on purchases in the first three months after opening.
The Chase Sapphire Reserve® is a standout premium credit card with plenty of luxury perks and statement credits to justify its annual fee.
- Access over 1,300 airport lounges worldwide with a complimentary Priority PassTM Select membership, plus every Chase Sapphire Lounge® by The Club with two guests.
- Up to $300 in annual travel credit each account anniversary year
- You can transfer rewards to all of Chase's travel partners including World of Hyatt, Southwest Rapid Rewards and many more
- Top-tier travel and shopping protections
- High annual fee
- Requires a high credit score
Highlights
Highlights shown here are provided by the issuer and have not been reviewed by CNBC Select's editorial staff.
- Earn 150,000 bonus points after you spend $6,000 on purchases in the first 3 months from account opening.
- Get $3,000 in annual value with Sapphire Reserve.
- Earn 8x points on all purchases through Chase TravelSM, including The EditSM and 4x points on flights and hotels booked direct. Plus, earn 3x points on dining worldwide & 1x points on all other purchases
- $300 annual travel credit as reimbursement for travel purchases charged to your card each account anniversary year.
- Access over 1,300 airport lounges worldwide with a complimentary Priority PassTM Select membership, plus every Chase Sapphire Lounge® by The Club with two guests. Plus, up to $120 towards Global Entry, NEXUS, or TSA PreCheck® every 4 years
- Get up to $150 in statement credits every six months for a maximum of $300 annually for dining at restaurants that are part of Sapphire Reserve Exclusive Tables.
- Count on Trip Cancellation/Interruption Insurance, Auto Rental Coverage, Lost Luggage Insurance, no foreign transaction fees, and more.
- Get complimentary Apple TV+, the exclusive streaming home of Apple Originals. Plus Apple Music — all the music you love, across all your devices. Subscriptions run through 6/22/27 — a value of $288 annually
- Member FDIC
Balance transfer fee
Either $5 or 5% of the amount of each transfer, whichever is greater
The processing fee on a $6,000 charge through Pay 1040 is $70, but 150,000 Chase Ultimate Rewards® points are worth at least $1,500 when redeemed for cash back or travel booked through Chase Travel℠. (They can be worth even more than that when transferred to travel partners.)
Fees for paying your taxes with a credit card
The IRS partners with two companies to process credit and debit cards. The fee structure depends on which provider you select
Pay1040
Pay 1040 accepts Visa, Mastercard, Discover, American Express, Diners Club International, STAR, Pulse, NYCE, Accel, AFFN, Cirrus, Interlink, Jeanie, Shazam, Maestro, China Union Pay and JCB.
Fee: 1.75% for personal credit cards ($2.50 minimum ), 2.95% or corporate cards ( $2.50 minimum) and a $2.10 flat fee for personal debit cards.
ACI Payments
ACI Payments accepts Visa, Mastercard, Discover, American Express, Star, Pulse and NYCE
Fee: 1.85% for personal credit cards ($2.50 minimum), 2.95% for corporate debit or credit cards ($2.50 minimum) and a $2.15 flat fee for personal debit cards
Alternatives to paying your taxes with a credit card
If you don't have the funds to pay your taxes and using a new or existing card is not an option, there are still options.
Personal loan
If your credit isn't great, getting approved for a personal loan can be easier than for a card. Loans also have lower average APRs. The rate is usually fixed, so you'll have predictable payments until it's paid off.
Your term can be a few months or up to three years (or more), although longer repayment periods usually mean higher APRs.
Home equity line of credit (HELOC)
A HELOC is a second mortgage with a lower interest rate than a credit card or personal loan. It could be appealing if you're house-rich but cash-poor, especially if you have good credit and a low debt-to-income ratio and aren't eligible for an IRS installment plan.
But a HELOC typically comes with origination and closing fees, and it puts your home at risk of foreclosure. So, it makes more sense for people who already have an active HELOC or whose tax debt is large enough that the IRS could place a lien on their house for nonpayment (usually more than $10,000).
Offers in this section are from affiliate partners and selected based on a combination of engagement, product relevance, compensation, and consistent availability.
Home equity loans
680
90%
HELOC, DSCR, cash-out refinance, crypto-backed loan
640
95%
IRS payment plan
The IRS offers two types of installment plans for filers who can't pay their taxes on time.
The short-term payment plan gives you 180 days to settle your bill. Compound interest accrues, however, and there is a failure-to-pay penalty of 0.5% per month. The maximum amount for a short-term payment plan is $100,000 in total taxes, penalties and interest.
A long-term plan gives you up to 72 months to pay. It comes with the 0.5% failure-to-pay penalty fee and other charges. The maximum amount for a streamlined IRS long-term payment plan is $50,000.
Other options with the IRS include an offer in compromise and being granted "Currently Not Collectible" status if you are facing financial hardship.
Tax relief company
Tax relief companies work with the IRS or your state revenue department to arrange installment plans, reduce your tax debt, provide relief from collections and stop garnishments and liens. They can also provide support if you're being audited.
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