Is It a Good Idea Pay taxes with credit card

When you're really worried about how you're going to manage to pay your taxes and it's close to the April deadline, you have to admit that from time to time, you toy with the idea that you might pay taxes with credit card. They accept plastic these days, and you shouldn't have to worry about using this facility, you tell yourself.

It doesn't stop there. If you want a filing extension, you can charge your estimate of what he you expect your taxes will amount to, to your credit card. Not to mention, he can pay taxes with credit card for your state income tax bill as well. Without a doubt, when it's such a troublesome and painful kind of payment as your taxes tend to be, painlessly putting it on plastic is a real temptation.

Of course the consents about in there somewhere. It's a pretty big problem, too. When you pay taxes with credit card, you have to pay the IRS a convenience fee that amounts to about 2%. Usu no matter what you buy what you credit card stored, merchant fees rose by 2% of your purchase strictly to get paid. Only, you pay it. It's the merchant who does. When it comes to paying taxes with credit card, the IRS isn't interested in picking up the tabs away your local store is. They pass it on to you.

Well, you're telling yourself, the 2% is really sound like that much. How much does it amount to an actual dollars?

Well, if you're paying a $500 tax bill, it would just amount to two about $10. It may seem like no biggie. But what if your tax bill is closer to $5000? Then you'll pay in excess of $100 as your convenience fee. Is that really worth it? And of course, we are overlooking how many charge thousands of dollars to your credit card, all that is going to start working on an interest as soon as the month is done. You had really been a topic of finances to make sure that you hate before the grace period is up.

All said, it can be a really unnecessary headache to take up to pay your taxes with your credit card. It's hard to say what you should do once you take the credit card idea off the table. You could ask relatives for help, or you could apply for a personal loan.

Minimizing the Hassle of Merchant Account Credit Card Processing

My, how times change! Only 15 years ago, if you paid for a purchase with cash, you were treated with respect. At worst, if you paid for a large purchase with stacks of cash, they thought you were a drug dealer. But they still treated you with respect. These days, if you don't accept credit cards, they think you're a terrorist trying to leave no tracks. You can't run any kind of business these days without accepting credit cards. You would probably have to send away nine out of ten customers. One reason small merchants stay away from credit cards is this - these merchant account credit card processing companies can be such a hassle to deal with.

Dealing with these companies, it's hard to not come away with the feeling that they have it all over you. And you can't do anything about it either because they have such insanely complex agreements and contracts that you just have to sign. You know you have to comparison shop, but it's not as simple as looking at a couple of numbers.

That's the way these merchant account credit card processing businesses have planned. They make their agreements and the structures so opaque that people just give up even trying to understand. Just signed with whoever has the most insistent salesperson.

Whatever you do or don't understand about the contract, do try to look out for a few basic things. Understand how to watch out for these problems and you will have secured yourself against most of their tricks.

Before you enter into any merchant account credit card processing contract, look for a way out. If they try to block your way out by charging you $5000 in termination fees, which isn't all that uncommon actually, look elsewhere. Typically, you shouldn't have to pay more than $250 in cancellation fees.

Credit card processing equipment is widely mass-produced and there's no reason that they should charge you a lot for it. But they do tend to treat equipment costs as a major source of profit.

Very often, the company will ask you to buy propriety software that's only available from them. And it can be quite expensive. If everything seems to work out well with the company and this is the only sticking point, you could perhaps see if they offer outright purchase.

If a merchant account credit card processing company only allows the lease of equipment, it shows that they are trying to milk you. Don't go that way.

Most credit card companies will charge you anything under 3.5% for a transaction. They call it their discount rate - even if it isn't anything as pleasant as a discount. It's money they take from your profits. They tend to offer their customers different rates depending on how long-standing a business you own, the kind of business you're in and your credit score. No matter how new you are, you may probably never have to pay them more than 2.5% discount rate. This may not sound like much, but it can quickly eat into your profits.

Learning how to Save on Credit Card Processing Fees

Let's say that you run a retail business selling computers. One day, you get a call from a salesman; he wants you to switch credit card processors. Go with it, he says, and you will have a free credit card processing terminal, a low discount rate, and very low administrative fees. You really hate those credit card processing fees; so you think to yourself that this could be a great offer. You sign up, and you watch closely to see how all the savings add up. Usually, the discount rate, which is what you have to pay the credit card company and credit card processing fees for each swipe, is officially 2%. But there are all kinds of complexities involved in the matter; usually, retailers find that their actual fees come to 5%. After about two months, the jig is up - the new people charge no less than the old people. You know that you've been had.

The problem is that understanding a contract for credit card processing fees can be a terrible task. It's like asking you to read your health care plan and understand the fine print. Any vendor can quote you very encouraging-sounding prices; but those will be special case prices that you can never take advantage of in real life. For instance, if a customer actually takes out an ordinary credit card and swipes it, that could qualify for the low rate. If there is no physical card and someone has to key in the number, or if a customer shows up with the government or business credit card, your processing fees go up.

And that isn't even it. For a credit card sale that you get to make, you need to pay something called transaction fees to the processor. It's about 30 cents for every sale. And of course, you have to have an Internet presence and credit card processing ability over the Internet. The payment gateway fee is another monthly drain on your resources. And then for debit card sales, there is the debit transaction fee, there are chargeback fees, address verification service transaction fees, termination fees and monthly fees. It's enough to put anyone off the whole thought of starting a business in the first place. Some processors are transparent upfront about all of this; others try to make their money by getting you completely confused. Basically, unless you have the mind of a corporate lawyer, there is really no way you can compare one offer with another.

The best way to make your way through all of this is as usual to learn enough about everything. You need to read up enough about the whole business so that you understand the terminology the business uses. Ask to see the fee schedule and sit down and evaluate it properly. Make sure that you don't sign a long-term contract; and be sure that whatever you do, you don't go with an unreliable operator just a pinch a few pennies.