You're charged a fee for the €convenience€
Every time you make a tax payment with your credit card, you aren't actually paying the IRS directly €" you're paying a third party service. These service providers all charge a €convenience fee€ for using their services, typically ranging anywhere from just under 2% to almost 4% of the amount you owe.
So, say you owe around $1500 in taxes, and you go with the service provider that charges 3.93% in interest. For using your credit card to make the payments, you could end up being charged an extra $59 that you wouldn't have to pay had you not broken out your card for a charge.
Your card providers don't like it
Paying for your taxes with your credit card makes you look desperate and hard-up for cash to your credit card providers, which can make you look like more of a credit risk €" something you DON'T want to happen.
Paying a large tax bill exclusively with your credit card will decrease your overall utilization ratio, which can lead to a lowered credit score, leaving to worry about credit repair on top of everything else.
This makes you look desperate to your card providers, who may just decide to give your account another look, possibly even going so far as to decrease your limit and increase your interest rates.
You could be charged more in interest
If you just charged a large tax bill to your credit card, you've created a ticking time bomb that could blow up in your face if you don't pay it off in time.
If the card you used to charge your taxes to already has a high APR rate, not only will you have to worry about the added convenience fee, you'll also be paying interest on the bill if you don't pay it off in time.
Your card's Rewards aren't worth it
€But, my card's got some pretty sweet Rewards deals; they'll make it all worth it, right?€ I hear you ask.
Even assuming your card has a worthwhile rewards offer, like 2% cash back on all purchases, it won't be enough to make up for the amount of money you've already put down on your taxes.
Simply put, if you're paying your taxes with credit cards for the rewards, you're doing it wrong.
The bottom line is€¦
If you've got a large tax bill that needs to be taken care of, don't put it all on your credit card, if you can; it'll only add to your worries.