IRS payment plan & new credit card

[Cazzieboy]

Hello,

Considering paying off an "IRS payment plan" balance with a new credit card that offers 12 months 0% APR. Confident I'll be approved for the card, however my curiosity is: Will there be any negative reaction from the bank card company for that charge? The IRS debt is not shown on any credit report when they do a credit check for the application. I don't know know if that would potentially cause a problem with the credit card company, or if it would even be questioned. Would greatly appreciate some of the experienced opinions out there!

Regards,

[JoeRockhead]

Really depends on the limit of the card and how much of it you use. If the amount used maxes out the new card it will have a fairly significant effect on your credit scores... If you already have other accounts with high usage, it could also lead to adverse action from your lenders. 

So, it really depends on what the rest of your credit looks like, and how much of the new card available balance is going to be used.

[Horseshoez]

@Cazzieboy, have you looked at the charge the IRS hits you with when you make a payment via Credit Card?  I haven't looked for a while, but a few years ago I considered this option, and when I saw what they charge, I quickly abandoned the idea. 

[Cazzieboy]

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@JoeRockhead wrote:

Really depends on the limit of the card and how much of it you use. If the amount used maxes out the new card it will have a fairly significant effect on your credit scores... If you already have other accounts with high usage, it could also lead to adverse action from your lenders. 

So, it really depends on what the rest of your credit looks like, and how much of the new card available balance is going to be used.

Hey, thanks for the quick reply.

The concerns you mentioned are not too much of an issue. 760 FICO - EXP - Approx. 1%  total utilization across 5 accounts. New card available balance usage would be probably about 30%. I could do this with an existing card at a 10% promotional APR for 12 months. Even that may be less than IRS costs. Thoughts?

Thanks so much.

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[GZG]

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@JoeRockhead wrote:

Really depends on the limit of the card and how much of it you use. If the amount used maxes out the new card it will have a fairly significant effect on your credit scores... If you already have other accounts with high usage, it could also lead to adverse action from your lenders. 

So, it really depends on what the rest of your credit looks like, and how much of the new card available balance is going to be used.

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as stated above, the harm would come from carrying a balance on your credit card, which could lead to AA if your profile looks like you're in financial distress

the fact that it is a charge from the IRS on the card doesn't cause any outsized scrutiny otherwise 

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@Horseshoez wrote:

@Cazzieboy, have you looked at the charge the IRS hits you with when you make a payment via Credit Card?  I haven't looked for a while, but a few years ago I considered this option, and when I saw what they charge, I quickly abandoned the idea. 

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dunno what it was before, but it's not bad at all now. even profitable on say a 3% paypal mastercard

[JoeRockhead]

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@Cazzieboy wrote:

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Hey, thanks for the quick reply.

The concerns you mentioned are not too much of an issue. 760 FICO - EXP - Approx. 1%  total utilization across 5 accounts. New card available balance usage would be probably about 30%. I could do this with an existing card at a 10% promotional APR for 12 months. Even that may be less than IRS costs. Thoughts?

Thanks so much.

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Currently the IRS says it's a 1.87% fee to pay by credit card... Given where you're at otherwise and provided you get the CL you're expecting, I'd pay the IRS off and move on to more pleasent things in life. 

[Cazzieboy]

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@JoeRockhead wrote:

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@Cazzieboy wrote:

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Hey, thanks for the quick reply.

The concerns you mentioned are not too much of an issue. 760 FICO - EXP - Approx. 1%  total utilization across 5 accounts. New card available balance usage would be probably about 30%. I could do this with an existing card at a 10% promotional APR for 12 months. Even that may be less than IRS costs. Thoughts?

Thanks so much.

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Currently the IRS says it's a 1.87% fee to pay by credit card... Given where you're at otherwise and provided you get the CL you're expecting, I'd pay the IRS off and move on to more pleasent things in life. 

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Appreciate you! Thanks much.

[Traveler101]

Some city's can be even worse if that's possible. We have a city here, that a 5.00 or more unpaid tax bill gets you a bench warrant in their court. Totally in agreement, get it gone 

[Horseshoez]

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@GZG wrote:

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dunno what it was before, but it's not bad at all now. even profitable on say a 3% paypal mastercard

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Wow, way lower than I remember; it has been quite a few years, but my memory is trying to convince me the number was more like 8%.

[pizzadude]

Considering that the IRS is charging you around 7% interest, if you can pay it off for around 2% the savings could be significant depending on the amount owed.

I don't think your CC will care that it's an IRS payment and even if you are close to maxed out it's one of those times where finances > FICOs.