Los Angeles, CA (PRWEB) February 17, 2013
Although a number of third-party companies are now offering to let taxpayers settle their tax bills with credit cards instead of cash, a new survey of more than 1,100 Americans by credit card comparison site CreditDonkey.com suggests that this is an idea whose time has not yet come.
Of those respondents who expect to owe additional taxes on their 2012 income (12.4 percent), only 21 people plan to pay with plastic
Survey Findings: http://www.creditdonkey.com/few-paying-taxes.html
“The downside of paying with a credit card is the ‘convenience fee’ or ‘card fee,’ ranging from 1.88% to 2.35%, that the companies charge to process tax payments with a credit card,” says Charles Tran, founder of CreditDonkey. “Still, many taxpayers who owe more than they expected might have little choice but to use their card and take their time paying back the taxman.”
Almost 77 percent of the survey respondents who think they’ll owe money to the IRS plan to settle that bill with a single cash payment, even though 60.1 percent are aware of the installment options for tax payments and 52.1 percent realize they could pay with a credit card. Only 23.2 percent of those owing taxes plan to take advantage of any type of installment plan.
Of the poll’s “lucky” respondents (those expecting refunds), most already have plans for the anticipated windfalls:
- 56.1 percent plan to put the money away for a “rainy day.” Among the savers, 8 percent will set aside the money for retirement, 17.3 percent will put it toward a college fund, 24.6 percent will save for a big purchase, and 50.1 percent will put the money into an emergency fund.
- Among those who plan to spend the refund, 13.7 percent will use it for a vacation, 8.5 percent for home improvements, 23.6 percent for a big purchase, and 54.2 percent for paying down their debt.
- 44.1 percent of those surveyed expect a refund of less than $500, 15.8 percent anticipate a refund of $500 to $999, 13.8 percent expect $1,000 to $1,999, and 13.9 percent plan to receive a check for more than $2,000.
To read the full survey findings, visit http://www.creditdonkey.com/few-paying-taxes.html
“If you do owe taxes, there are ways to cut your losses – and even come out a little ahead,” says Tran. “If you have a credit card that requires a high spending minimum to qualify for extra bonus points, a high tax bill could easily cover that amount. You could also pay with a new card that offers a 0% introductory APR for a set period. That way, in exchange for the convenience fee, you’ll receive some interest-free breathing room for a while.”
To compare credit cards to pay taxes with, visit http://www.creditdonkey.com/pay-taxes.html
CreditDonkey surveyed 1,109 people between January 15 and January 22, 2013 on the subject of personal income taxes. For more information from the CreditDonkey.com Income Tax Survey, visit http://www.creditdonkey.com