Paying for property taxes — and most other things, really — can be done with a debit or credit card. The question is, is using a credit card to pay property taxes worth the cost?
If you’d like to pay direct, many municipalities have their own sites that allow homeowners to pay property taxes online with a debit or credit card for a fee, usually around 2-3 percent of the tax. With property taxes averaging thousands of dollars, adding extra percentage points on top can amount to a sizable increase in what you owe. For some people, though, a few hundred dollars in fees may be worth the benefits that come with putting their taxes on a card.
Having More Time to Pay
Additional time is one of the main advantages to paying for anything on a card. If you use your credit card for property taxes, you can effectively extend the deadline date by spreading your balance over a number of pay cycles. Of course, for most cards, carrying a balance involves paying interest. A revolving balance of a few thousand dollars over several months can mean adding hundreds of dollars to what you owe.
If you’re set on putting your property taxes on a credit card and paying the balance off over time, you may want to consider a card with a promotional 0% introductory APR on purchases. These types of offers allow spenders to temporarily carry balances without accruing interest on purchases. Keep in mind, you’ll still be responsible for making all of the minimum payments — and not doing so will typically allow the issuer to start charging interest.
Earning Points and Perks
Another benefit to putting large purchases like property taxes on a credit card is the potential to earn rewards such as points or cash back. For example, a cash back credit card may offer rewards on spending categories like gas, travel and groceries. Plus, these cards may also offer a certain percentage back on all other purchases, property taxes included.
You can also earn extra rewards on cards with a sign-up bonus or cards with a rewards match. So if you’ve just signed up for a card that requires you to spend a few thousand dollars to hit a bonus, using it to pay your property taxes can mean a quicker route to your rewards. Or if you’ve just signed up for a card that offers a rewards match, you could earn rewards when you make your property tax payment and then get rewarded again later when your card matches those rewards.
Should You Use Your Credit Card to Pay Property Taxes?
If you can afford to pay your property taxes in full, paying with cash or check will avoid having to tack on an unnecessary credit card surcharge. But if you need some more time — or figure you can earn rewards that exceed the cost of the transaction fees and applicable interest charges — paying with a card may be the way to go.