When paying your taxes this year, it may be an enticing option to let your credit card foot the bill. However, this is not a responsible use of credit, unless you are absolutely unable to fund the payment from another account.
Incurring large fees on your credit card will not only boost the amount of money consumers will pay in interest, but specifically with taxes, there will be an extra charge of 2 percent of the entire tax amount one owes, according to The Associated Press.
It is a transaction similar to shopping at the mall. When you pay for a purchase with your card, the store is charged a small percentage for allowing you to swipe your card. In the same fashion, the tax company you use to file your return is charged, but they are passing on the cost to the consumer.
Those who have bad credit should avoid charging their taxes, as higher balances only hurt your credit score by decreasing the debt-to-credit-limit ratio. When one's FICO score is poor, it could hinder their chances at getting good interest rates on car loans, mortgages and more.