topic Re: Paying federal tax owed with CC in Rebuilding Your Credit

Paying federal tax owed with CC

Anonymous — Fri, 09 May 2008 00:31:52 GMT

I'm not sure where to post this, but I owe money this year. Which is better, getting on IRS's payment plan or using my emergency CC that I got 2 months ago and paying it with that. My plan is to use my $600 rebate and go towards the payment (i owe $1500). And since I am trying to raise my score to buy a car in a couple of weeks, will it drastically lower my score with the ratio.

And then I was thinking....is IRS's interest really all that better than my CC?

Re: Paying federal tax owed with CC

Jesedmotherof5 — Fri, 09 May 2008 00:33:32 GMT

humm good question, Intrest may not be as much but your not building your credit with the IRS... Just a thought, your card might like to see that activity!

Re: Paying federal tax owed with CC

Anonymous — Fri, 09 May 2008 00:38:22 GMT

vesper wrote:
I'm not sure where to post this, but I owe money this year. Which is better, getting on IRS's payment plan or using my emergency CC that I got 2 months ago and paying it with that. My plan is to use my $600 rebate and go towards the payment (i owe $1500). And since I am trying to raise my score to buy a car in a couple of weeks, will it drastically lower my score with the ratio.

And then I was thinking....is IRS's interest really all that better than my CC?

If you owe, you won't get the rebate. It will automatically be applied to your debt.

Have you began a repayment plan? I am not sure what the interest rate is.

After you buy the car in a couple weeks, are you going to be app'ing for anything else soon?

You might buy the car and then pay with your CC. Your scores may decrease while you are paying the balance down.

Is this your only CC? What is your CL? What will your util be?

I guess it is really a personal choice. For me, I'd rather owe a CCC than the IRS.

Re: Paying federal tax owed with CC

Anonymous — Fri, 09 May 2008 00:44:16 GMT

If you owe, you won't get the rebate. It will automatically be applied to your debt.

It wasn't! I got the bill from them for it. I didn't send in a check with my paperwork because I thought that they would subtract the $600

Have you began a repayment plan? I am not sure what the interest rate is.

I haven't begun, but wanted to see others thoughts on this.

After you buy the car in a couple weeks, are you going to be app'ing for anything else soon?

No, I'm not going to apply for anything else. I just need to get the car because my current car is dying.

You might buy the car and then pay with your CC. Your scores may decrease while you are paying the balance down.

Oh, I thought they increased when you pay down a balance?

Is this your only CC? What is your CL? What will your util be?
My CL is $3000. I will have all my balances paid down in full this month.

I guess it is really a personal choice. For me, I'd rather owe a CCC than the IRS.

True that. I just wasn't sure how bad it would effect my scores.

Re: Paying federal tax owed with CC

Anonymous — Fri, 09 May 2008 00:52:29 GMT

If you will have a 0 balance as you said, put it on your CC. After applying your rebate to your taxes, you will only have 30% uti on your card, this is not bad at all. Owing the IRS, using a payment plan, etc, should be avoided at all cost! You are in a good position to use your CC here.

Re: Paying federal tax owed with CC

Anonymous — Fri, 09 May 2008 00:57:37 GMT

Okay, here's a question. I just looked at my bill for the CC. The total is $586 which I used it to repair my car. My due date is the 15th this month, but I don't get my paycheck until that day as well. Is it okay to put say $200 for the payment before the 15th and then put the remaining amount after my paycheck goes through? Or is it pointless to do that?

I have a special intro APR of 0% until september. So, i wasn't sure if i don't pay the full amount if they will start adding interest on my bill? I'm so new at this....

Re: Paying federal tax owed with CC

Anonymous — Fri, 09 May 2008 00:59:47 GMT

You just have to have a 0 balance in september, or they will tack on ALL previous intrest charges. (you have to read the fine print, but this is usually the case.) Make sure if you put your taxes on there you can pay it to 0 before september.

Re: Paying federal tax owed with CC

Anonymous — Fri, 09 May 2008 01:01:15 GMT

thank you fender!!!! i will totally pay it before than. I just want to be perfect for now on on everything! No more messing up for me....learned my lesson.

Re: Paying federal tax owed with CC

Anonymous — Fri, 09 May 2008 01:39:25 GMT

vesper wrote:
If you owe, you won't get the rebate. It will automatically be applied to your debt.

It wasn't! I got the bill from them for it. I didn't send in a check with my paperwork because I thought that they would subtract the $600

I understand that you might have gotten a bill for the full amount. But, have you gotten the rebate? According to their website, if you owe they will not send the rebate, they will apply it to your debt. The bill probably was for the full amount due to the fact that you haven't been issued the rebate for them to withold and apply to the debt. If that makes sense. I guess what I am saying is, your rebate will be processed the same date it would be if they were mailing it, and until that date(when it is processed) they won't apply it to the debt.

Have you began a repayment plan? I am not sure what the interest rate is.

I haven't begun, but wanted to see others thoughts on this.

After you buy the car in a couple weeks, are you going to be app'ing for anything else soon?

No, I'm not going to apply for anything else. I just need to get the car because my current car is dying.

You might buy the car and then pay with your CC. Your scores may decrease while you are paying the balance down.

Oh, I thought they increased when you pay down a balance?

What I meant was when the high balance first reports, your scores will decrease a bit, more than likely. It wont bounce back up until you get the balance paid down. I worded it wrong.

Is this your only CC? What is your CL? What will your util be?
My CL is $3000. I will have all my balances paid down in full this month.

I guess it is really a personal choice. For me, I'd rather owe a CCC than the IRS.

True that. I just wasn't sure how bad it would effect my scores.

Re: Paying federal tax owed with CC

Anonymous — Fri, 09 May 2008 14:17:06 GMT

Because you have 0% int. till Sept. I would put what you owe on the CC. As side said the IRS should put the $600 toward the debt. The raise in debt might drop scores a little BUT they will go up as you pay the CC down.

Re: Paying federal tax owed with CC

Anonymous — Fri, 09 May 2008 17:05:51 GMT

The $600 wasn't applied. I figured it is because according to my last 2 digits of social security number, mine won't be processed until july.

Re: Paying federal tax owed with CC

Anonymous — Sat, 10 May 2008 02:11:02 GMT

fender wrote:

You just have to have a 0 balance in september, or they will tack on ALL previous intrest charges. (you have to read the fine print, but this is usually the case.) Make sure if you put your taxes on there you can pay it to 0 before september.

Most CCs don't work this way. Only specialty cards like CareCredit and 0% financing on store cards have provisions like this. Regular Visa/MC/Amex/Disc bankcards don't normally have provisions for retroactive finance charges after an intro rate expires.

Re: Paying federal tax owed with CC

Anonymous — Sat, 10 May 2008 02:14:07 GMT

vesper wrote:
Okay, here's a question. I just looked at my bill for the CC. The total is $586 which I used it to repair my car. My due date is the 15th this month, but I don't get my paycheck until that day as well. Is it okay to put say $200 for the payment before the 15th and then put the remaining amount after my paycheck goes through? Or is it pointless to do that?

I have a special intro APR of 0% until september. So, i wasn't sure if i don't pay the full amount if they will start adding interest on my bill? I'm so new at this....

I you have a 0% intro rate, they won't add any finance charges until the intro rate expires, regardless of whether you PIF. That's why it's 0%.

Be aware that paying taxes with a CC will require you to use a payment processor who will add a service fee of 2.49% right off the bat!

Message Edited by cheddar on 05-09-2008 07:14 PM

Re: Paying federal tax owed with CC

caliness1 — Sat, 10 May 2008 03:45:28 GMT

vesper is right. Your refund will be applied automatically to what you owe the IRS. At least, that;s what they've done with me.