Updated
Fact Checked
Eric McWhinnie
For many folks, credit cards are the first payment method that come to mind for just about anything, including property taxes. For rewards credit card users, especially, a big bill like property taxes can seem like a pile of rewards just waiting to be collected. But can you pay property taxes with a credit card in the first place? And even if you can, should you? Our guide will answer these questions and more.
How to pay property taxes with a credit card
The majority of states and counties will allow you to use a credit card to make your property tax payments. However, there's no guarantee. You should double check with your local tax collector to verify whether they accept credit card payments.
If your county accepts credit cards, you can usually pay your taxes online. Some counties may process the credit card transaction themselves. Others may use a third-party payment processor. Either way, you'll probably be charged a service or convenience fee.
The actual process of making the payment is pretty straightforward:
- Enter your property tax information -- e.g., Property ID number or Assessor's Identification Number (AIN) -- to find your property tax record
- Enter or confirm any required personal information
- Choose your payment method and amount
- Provide the credit card information for the card you want to use
- Submit your payment
Credit card payments may take a few days to process.
Should you pay property taxes with a credit card?
Although you may be allowed to use a credit card to pay your property taxes, it isn't always -- or even often -- the best idea. Let's take a look at the things you should consider before paying your tax bill with a credit card.
Be prepared to pay a service fee
The main reason to pay your property taxes with cash (or a bank transfer) instead of a credit card is the service/convenience fee. Credit card companies charge fees to process credit card transactions. While most retailers eat those fees, the government is more than happy to pass them onto you.
RELATED: Cash vs. Credit Card
The fee to use a credit card will vary based on your county, but they're almost always at least 2% and often more than 2.5% of the total tax amount. For example, LA County in California charges a fee of 2.22% to use your credit card, while Broward County in Florida charges a 2.55% fee.
This fee can be worth paying if you're getting more value from using your card. But that requires choosing the right card for the payment (more on that below).
Some processors may have transaction limits
Most counties will use a third-party payment processor to handle your credit card payment. These processors may impose limits on how much you can charge in one transaction. The limits are usually pretty high -- think $99,999 per transaction -- so this isn't something that likely applies to most people, but it's worth noting.
Make sure you can pay off your balance quickly
An important thing to consider when making any large credit card purchase is whether you can pay it off quickly. This is a two-fold issue. First, there's your credit utilization to consider. Your credit utilization is how much of your available credit you're using.
LEARN MORE: What Is Your Credit Utilization Ratio?
Credit utilization is one of the factors that goes into calculating your credit score. High utilization is seen as a red flag and can reduce your credit score. On the plus side, your score should recover completely once you pay down your credit card balance. (Note that it won't be immediate. Most credit card companies only report to the credit bureaus once a month.)
The more important consideration when making large credit card purchases is the interest. Unless you have some sort of intro APR offer (more on that below), your property tax purchase will start accruing interest after your due date. The longer it takes you to pay down the bill, the more interest will accrue. Credit cards tend to have very high interest rates, so that interest will grow much more quickly than you might anticipate.
LEARN MORE: How Credit Card Interest Works
Which card should you use to pay property taxes?
The card you choose to pay your property taxes will define the experience. If you can't earn enough credit card rewards, the service fee may not be worth paying. The exception? If you need extra time to pay your tax bill and want to use an intro 0% APR offer to make up the difference. Either way, the right card is vital.
LEARN MORE: How to Choose a Credit Card
Consider the rewards rate
The service fee that inevitably comes with using your card to pay your taxes means the rewards rate is important. Services fees can easily top 2.5%, so even the best cash back cards on the market will be hard-pressed to compete.
This leaves rewards points cards. Most consumer points cards earn a base rate of 1x point per $1 on non-bonus category purchases. This means you need to choose a points program that gives you the opportunity to get a lot of value from those points.
LEARN MORE: How Credit Card Points Work
How much you value specific points is personal, but the best value tends to come from transferable points. The four most popular transferable points programs include:
If you can transfer your points to a partner airline or hotel program, the potential value is huge. It's not unheard of for people to get $0.03 or more per point with a smart redemption. A 2.5% service fee may be worthwhile if you can get a 3%-plus return on those rewards.
Work toward a sign-up bonus
In some cases, it might be worth paying a service fee even if your points don't make up the value. Why? Because of the welcome bonuses. These are bonus points or cash back you can earn on new credit cards for meeting a specific spending requirement within a set amount of time (usually within 90 days of account opening).
RELATED: Best Sign-Up Bonus Credit Cards
Some credit card welcome bonuses can reach $500 to $1,000 in value. But those big bonuses also come with big spending requirements. That $500 bonus may require $5,000 or more in spending within just a few months. This can be a hard sell for folks on a budget.
If you're eyeballing a valuable rewards card with a super-sized bonus, your property tax bill could go a long way toward meeting the equally oversized spending requirement. In that situation, paying $100 in fees is a small price to earn $500 or more in rewards.
Look for an intro APR offer
The only time the rewards don't matter -- as much -- when using a credit card to pay your property taxes is if you really need to spread out your payments. Many cards come with 0% intro APR offers that can give you no interest on new purchases for 12 months or longer. Some of the best offers extend more than 18 months.
RELATED: Best 0% Intro APR Credit Cards
Using a card with an intro APR offer to pay your property taxes means you can satisfy the government without breaking the bank. Then, you can make smaller monthly payments on your credit card without worrying about high interest rates.
Keep in mind you still need to make payments, though. You'll be responsible for making at least the minimum required credit card payment each month by the due date. If you miss a payment, you'll be subject to late fees and could lose your intro APR offer. Missing multiple payments could also hurt your credit score if they're reported to the credit bureaus.
FAQs
-
Most states and counties will allow you to pay your property taxes online with a credit card. However, it's best to contact your local property tax collector to verify whether they take credit cards and which networks are accepted.
-
Yes, most rewards credit cards will earn rewards on property tax payments. If you are concerned, reach out to the issuer or check the card's terms and conditions to ensure tax payments aren't specifically excluded.
-
No, the act of using your credit card to pay property taxes won't specifically raise your credit score. Using your credit card to make purchases, then paying off the balance on time every month can improve your credit score over time.
Our Credit Cards Experts
Brittney started her writing career in the world of science, putting her physics degree to good use. Her journey into finance started with building her personal credit, but soon grew into a borderline obsession with credit cards and travel rewards. For the last 7 years, she has enjoyed the ability to share her expertise with readers, as well as the opportunity to interview companies and individuals making an impact on our financial lives. She wholly believe most problems can be solved with the right research -- and a good spreadsheet -- and she specializes in translating complex financial topics into actionable advice to help educate and empower readers.
Fact Checked
Eric McWhinnie
Eric McWhinnie has been writing and editing digital content since 2010. He specializes in personal finance and investing. He also holds a bachelor’s degree in Finance.
Share This Page
We're firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.
Citigroup is an advertising partner of The Ascent, a Motley Fool company. American Express is an advertising partner of The Ascent, a Motley Fool company. JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Brittney Myers has positions in American Express. The Motley Fool has positions in and recommends JPMorgan Chase. The Motley Fool has a disclosure policy.