You can pay just about anything with a credit card today, even your mortgage or rent. It’s all natural…

You can pay just about anything with a credit card today, even your mortgage or rent. It’s only natural to wonder what else you can afford with a credit card, like property taxes.

The IRS allows you to pay your federal taxes with credit cards, so why not local taxes too?

Well, just because you can do something doesn’t mean you should. While there can be some benefits to paying property taxes with a credit card, there are some considerations you should take into account before doing so.

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Is it possible to charge property taxes on a credit card?

The short answer is, “Yes, property taxes can be paid using a credit card,” says Janet Alvarez, editor of personal finance website Wise Bread, “although a convenience fee of 2% or more can be applied. ”

Nonetheless, check with your local tax collector’s office to see if your city or county accepts credit card payments for property taxes, as not all do.

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Should you pay your property taxes with a credit card?

“As with any financial decision, be sure to weigh the pros and cons to ensure that the benefits of making payments this way outweigh the costs,” says Jeffrey Wood, CPA and partner at Lift Financial at South Jordan, Utah.

Some people love to use their credit cards for everything – and for good reason, says Wood. You earn rewards for your purchases and you gain more time to pay because your money stays in your bank account, where it continues to earn interest.

Benefits of paying property taxes with a credit card:

“If you have a low interest or no interest credit card and you’ll earn cash back or other rewards for a big tax payment, paying by credit card may be worth it,” says Alvarez. .

Remember that the reward should outweigh the processing costs. Paying property taxes with a credit card can also be helpful if you’re trying to hit the card’s minimum spending to earn a reward, like companion tickets or airport lounge passes, Wood says. .

In such cases, “the cost of using the card may be less important to an individual than hitting those incentive milestones,” he says.

Then there is the potential benefit of avoiding a late tax payment. If using a credit card allows you to pay on time and avoid penalties and interest charges, you might want to fork out the processing fees, Wood says.

Each jurisdiction sets its own delay penalty. Make sure you know what fees you might be facing before you leave your property taxes overdue.

Residents of San Francisco County, for example, will have to pay a 10% penalty on unpaid portions of property taxes, as well as possible one-time administrative fees. On the opposite coast, Montgomery County in Maryland adds a penalty of 1.67% per month to overdue tax bills up to a total annual late charge of 20%.

Cons of paying property taxes with a credit card:

“The main obstacle to using credit cards for property taxes is that most jurisdictions will charge a processing fee for paying your taxes with a card, typically between 2% and 3%,” says Wood.

Rather than accepting these fees as a cost of doing business, government agencies pass them on, Wood says.

“Since most card rewards are no more than 2-3%, it’s usually 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 your balance. When you carry over debt you start to accumulate interest charges and have the added stress of not knowing when your card will be paid off.

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How to pay your property taxes with a credit card

If your jurisdiction accepts credit card payments for property tax bills, you probably have more than one way to make the 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 via ACI Payments, a website licensed by the IRS, says Alvarez. Keep your invoice or statement handy in case you need information, such as your jurisdiction code, to process your payment. The site also offers a fee calculator.

If your local tax collector’s office is open, paying by credit card in person may also be an option.

“As with payments made by other methods, you’ll still be entitled to a refund if you’ve overpaid your taxes on the final reconciliation at the end of the year,” Wood said. “You can also make advance payments on your taxes owed throughout the year, just like with any other method. “

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Can you pay property taxes with a credit card? originally appeared on usnews.com