1-800-548-4639Tax debts can be overwhelming, especially for those who aren’t expecting them. If you are hit with a huge bill, you might be tempted to charge it all to your credit card. At least that gets the IRS off your back, right?
Even though you may be able to escape the government with your credit card, you could face a slew of other problems that you need to know about. Here are some issues to keep in mind:
- Your credit score could drop because you have a higher debt to available balance ratio.
- You may lose some of your emergency funds because your card is maxed out.
- You might be charged large fees because some credit card companies assess this as a cash advance payment.
- You may face higher interest payments, depending on which card you use.
- You will limit the amount of credit you can apply for in the near future.
- You still will have to pay everything back.
If you can get around these negatives, by all means give it a try. In most cases though, it is easier to work out an installment plan directly with the government. You’ll owe the same money no matter what. You might as well take out the middle man. Before you try to swipe yourself out of debt, consider some of the alternatives.
Authored by the BC Tax Insights Team, this article reflects the collective expertise and experience of our seasoned tax professionals. The Insights Team at BC Tax comprises specialists with a deep understanding of various tax scenarios and solutions. With a focus on providing informative, accurate, and practical insights, our goal is to guide readers through the complexities of taxation and financial planning. Every piece is crafted with the intent to help individuals and businesses navigate the ever-evolving world of taxes, ensuring clarity and confidence in decision-making.
