A small but growing number of Pennsylvania residents are opting to use credit cards to pay their taxes, despite the fact that they are charged extra to do so.
According to a report in the Pittsburgh Post-Gazette, more towns, cities and counties in the state are now allowing residents to take on credit card debt to pay their taxes online. And though this payment method comes with a fee of about 3 percent, it is quickly growing in popularity. These fees are being charged to offset the cost of having a third party process the transaction, since the state is not able to do so itself.
One local tax collector told the paper that his office has typically heard three reasons for consumers to pay by credit card despite the additional fee: a cash flow problem, the appeal of earning credit card rewards points or miles, or the convenience of being able to pay the bill online.
The Internal Revenue Service allows Americans to pay their federal taxes by credit card as well. Like Pennsylvania, the IRS charges a small percentage per transaction because it too has to go through a third party to process the payments.