Finance Charge when Paying Taxes
Hello,
Was super surprised that Credit card companies can charge 2.5% fee if your pay your taxes using a credit card!!!
How is this possible and what right does Chase bank have to do this?
Terry Says
I’m surprised that you’re surprised! Yes, you can pay your taxes by credit card. And YES, there is a fee. In fact, it doesn’t all go to the bank. The IRS charges a convenience fee too!
Convenience fees: The IRS won’t accept a credit card payment directly. It works with payment processors that accept credit card payments. Each processor on the IRS website charges a convenience fee that varies slightly depending on the processor. The fees area round 2% of the tax amount you are charging to the credit card. You choose which processor you want to use before you send a payment.
So if you’re trying to earn a bonus by making a big charge on a new credit card, just understand the costs of the points you’re getting and decide if it’s worth it.
And, remember, if you don’t pay this off in full immediately, you’re going to be paying a lot more than a convenience fee; you’ll be paying a lot of interest!
