Your Money: Paying the IRS with a credit card? Weigh the pros and cons first
News from Indianapolis Star:

Like extreme couponers who dive into dumpsters in search of newspaper circulars, credit card rewards chasers will go to great lengths to earn points. A $ 100 gas fill-up? Whoo-hoo, double points! An emergency appendectomy? Doctor, do you accept American Express?

The last few months have been particularly lucrative for rewards chasers. Credit card issuers have sweetened their offers, showering big spenders with airline miles and cash.

Perhaps you’re wondering if the upcoming tax deadline presents an opportunity to add to your stash. The IRS accepts plastic, and the prospect of a free trip or upgrade could take the sting out of your annual obligation to Uncle Sam.

Sadly, though, the cost of paying your taxes with a credit card usually exceeds the value of the rewards, says Jeffrey Weber, founder of Smart

That’s because unlike retailers, the IRS doesn’t absorb the convenience fees charged by third-party service providers to process the transaction. Convenience fees range from 1.89 percent to 3.93 percent of your payment.

Here’s the problem: The maximum cash back from most rewards cards is 1 percent. A few issuers give cardholders a year-end bonus that pushes the reward up to 1.5 percent, but even then, you’re paying more in convenience fees than you’ll get back in cash, Weber says.

When paying your taxes with…………… continues on Indianapolis Star

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