Can You Pay Property Taxes With a Credit Card?
You can pay for just about anything with a credit card today, even your mortgage or rent. It’s only natural to wonder what else you can pay with a credit card – like property taxes.
Well, just because you can do something doesn’t mean you should. While there may be benefits to paying property taxes with a credit card, there are some considerations before you do.
Is Charging Property Taxes to a Credit Card Possible?
The short answer is: “Yes, property taxes can be paid using a credit card,” says Janet Alvarez, executive editor of personal finance website Wise Bread, “though a 2% or greater convenience fee may be applied.”
Still, check with your local tax collector’s office to confirm whether your city or county accepts credit card payments for property taxes because not all do.
Should You Pay Your Property Taxes With a Credit Card?
“As with any financial decision, be sure to weigh the pros versus the cons to ensure the benefits of making payments in this manner outweigh the costs,” says Jeffrey Wood, CPA partner at Lift Financial in South Jordan, Utah.
Some people love to use their credit cards for everything – for good reason, Wood says. You earn rewards for your purchases buy yourself more time to pay as your money stays in your bank account, where it continues earning interest.
Pros of Paying Property Taxes With a Credit Card:
“If you have a low- or no-interest credit card will be earning cash back or other rewards for a big tax payment, paying by credit card can be worthwhile,” Alvarez says.
Just remember that the reward needs to outweigh the processing fee. Paying property taxes with a credit card can also be helpful if you are trying to reach the card’s spending minimum to earn a reward, such as companion tickets or airport lounge passes, Wood says.
In such cases, “Perhaps the fee for using the card is less important to an individual than reaching these incentive milestones,” he says.
Then there’s the potential benefit of avoiding a late tax payment. If using a credit card allows you to pay on time avoid penalties interest charges, then you may want to fork over the processing fee, Wood says.
Each jurisdiction sets its own late payment penalty. Make sure you are aware of the fees you may face before you let your property taxes become overdue.
San Francisco County residents, for instance, will owe a 10% penalty on unpaid portions of property taxes, plus a possible one-time administrative fee. On the opposite coast, Montgomery County in Maryladds a 1.67% penalty monthly to delinquent tax bills up to a 20% total annual late charge.
Cons of Paying Property Taxes With a Credit Card:
“The primary deterrent to using credit cards for property taxes is that most jurisdictions will charge a processing fee for paying your taxes with a card, usually between 2% to 3%,” Wood says.
Rather than accept this fee as a cost of doing business, government agencies pass it along, Wood says.
“Since most card rewards are not as high as 2% to 3%, this usually makes it not worth paying with a card,” he says.
Another risk of using your credit card to cover property taxes is when you can’t pay off your balance. When you carry over debt, you start racking up interest charges have the added stress of not knowing when your card will be paid off.
How to Pay Your Property Taxes With a Credit Card
If your jurisdiction accepts credit card payments for property tax bills, you likely have a few ways to make payments.
Many jurisdictions have online portals where payments can be made, Wood says. Try a simple internet search or contact your jurisdiction directly to find out where to pay.
You can also make a payment through ACI Payments, an IRS-authorized website, Alvarez says. Keep your bill or statement handy in case you need information, such as your jurisdiction code, to process your payment. The site also provides a fee calculator.
If your local tax collector’s office is open, paying by credit card in person may be an option as well.
“As with payments made by other methods, you will still be eligible for a refund if you have overpaid your taxes upon final reconciliation at the end of the year,” Wood says. “You can also make prepayments on your taxes due throughout the year, just as with any other method.”