paying property tax with a CC

BaluBalu

looking for folks' experience in paying property tax with a CC.

My county accepts a CC but the processor charges a convenience fees which is equivalent to the rewards I would get from the BoA CC. But I do not have to pay back the CC balance for another year (interest and penalties free). I am inclined to use the CC to pay the property tax but want to make sure it is not treated as a cash advance by BoA. Tried to call BoA but their telephone line BOT is difficult to side step.

msf

I pay property taxes and state and federal income taxes routinely by credit card. All of these go through as regular charges. Though ultimately it depends on what the vendor (county) puts through to the bank.

With BofA one can get 2 5/8% back on some of their credit cards - any credit card paying 1.5%, boosted by 75% with BofA platinum honors ($100K+ in BofA and Merrill accounts combined).

It's hard not to make money paying taxes that way. Even without a year's free interest.

BaluBalu

Thanks, @msf. It is 2 5/8%. You are correct, it is the merchant's characterization that controls. So, as you say I will make some money even without the free interest.

I asked Gemini and it says Santa Clara county treats the CC payment as a purchase and not as a cash withdrawal! If I do not post back, assume it was all good. Thanks.

bee

Some credit card also offer a bonus (in dollars or points) if you spend $X,XXX in the first number of days of the card's use.

Your Tax bills might satisfy that bonus requirement day one. Nice.

habsui

I have been paying property taxes with a credit card for years.
In my case, county charges 2.5% fee.

BaluBalu

The service fees in my case was 2.2%. In my CC account the transaction posted as from the county for the tax amount and a separate service fees from a processor for the 2.2%. I will have to see if the tax amount is not treated as a purchase. If this works out, I plan to pay property tax in the future with a CC. I might even start paying my income tax with a CC when my overpayments are used up. Better than giving out my bank details and worry about data leaks. (I send money from brokerage to bank and then pay by eCheck.)

rforno

My county has pretty high 'service' fees for credit cards, so I do e-check.

However, I pay my federal taxes in my CC and get double-points for a reasonable 'service' fee, so that's a nice win.

BaluBalu

A slightly unrelated question.

Fidelity taxable brokerage account allows us to write eChecks. If you write a Fidelity eCheck (it is actually on a UMB bank, N.A. bank) when you have a security lock on your fidelity brokerage account, does the eCheck go through or you have to keep the security lock off until the eCheck clears? You can not do asset transfers out of Fidelity when the security lock is on.

msf

While you cannot push an ACH "transfer" while your account is locked, you can still push electronic payments (eChecks) via BillPay (and also paper checks via BillPay). ACH transfers pulled from outside (direct debit payments, ATM withdrawals) are also unblocked.

Transactions not affected

✅ Deposits or Transfers into your Fidelity accounts

✅ Checkwriting and Direct Debit

✅ Debit card/ATM transactions

✅ Trading

✅ Scheduled Required Minimum Distribution (RMD) or Personal Withdrawal Scheduled Plan

✅ BillPay

https://digital.fidelity.com/ftgw/digital/security/lockdown/info