Did you pay your taxes with a credit card this year?
If so, you probably paid a fee to do so, and by now you’re probably paying credit card finance charges as well (interest).
This double-whammy is no way to relieve yourself of the tax burden, as you’ll end up paying a whole lot more if you don’t do anything to pay down that debt.
Unfortunately, it’s a bit of a catch-22, as those who rely upon credit card companies to pay their taxes likely don’t have the cash to pay them.
So what do you do?
Well, one strategy to knock away the debt slowly without incurring hundreds to thousands of dollars in finance charges is by executing a balance transfer.
With a balance transfer credit card, you can move the tax debt from your high-interest credit card to a 0% APR credit card.
In fact, some balance transfer offers now come with 0% APR for 24 months, meaning you’ll have two entire years to pay down that debt, if in fact you need that much time.
So if your tax bill was $5,000, monthly payments of roughly $210 would get you out of debt in two years, all without any interest expense (less any balance transfer fees).
And if you happened to come upon more money, you could pay down the debt even quicker.
Either way, it certainly beats paying fees on top of fees, especially with next year’s taxes already looming.
(photo: thetruthabout, CC)
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