If paying taxes with credit was a mistake, debt management plan could help reduce interest

By Marvin Milner on Mar 29th, 2010

With tax time coming up, consumers in a rush to make good with the Internal Revenue Service may consider using credit card debt for what they owe.

However, a recent article from the Chicago Sun-Times notes doing so could end up costing consumers in the form of fees. Relying on data from LowCards.com, the reports said that the average cost of convenience fees is about 2.45 percent of the total tax bill.

"The IRS notes the convenience fee is deductible as a miscellaneous itemized deduction subject to a limit," the Sun-Times said.

The paper said that if a person does consider paying for the taxes with a credit card, they should make sure they know how much is already charged on the account.

Having paid their taxes with plastic, some may find that down the road doing so was a mistake because they can't afford to pay off debt. However, a debt management plan may be able to help by reducing the amount of interest a consumer pays over time.

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