Can I Pay My Property Taxes With a Credit/Debit Card?
Virtually all local governments allow property taxes to be paid with credit and debit cards, which makes it easier for you to make payments. Payments can be made in person with most municipalities allowing online payments as well. Online payments are usually simple and safe and typically offer confirmation numbers for easy tracking.
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Surcharges
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Paying by credit card or debit card creates an additional expense in some instances. City and county governments usually impose a surcharge for paying with the cards. Usually the fee is around 2 percent of the total. The governments impose the fee to recoup processing fees that they must pay banks. For example, as of February 2011, the property tax collector in Dallas County, Texas, charges a surcharge of 2.3 percent for credit cards and a flat fee of $3.95 for each debit card transaction. Local governments generally allow debit and credit cards to be used when paying in person, through the mail or over the telephone.
Online Fees
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Many city and local governments use third-party sites to accept property tax payments online. The online sites all accept debit and credit cards, but the fees can be significant for a large bill -- around 7 percent or more of the total. Third-party sites record your payment and pass it on to the state or country government responsible for collecting your taxes. The third-party sites allow you to create online profiles that record a list of your payments and other information to make future payments quicker and easier. Some local governments offer their own online sites for collecting payments, with the fees generally less than fees paid to third-party sites.
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Finance Charges
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Paying by credit card also creates additional costs if you choose to carry the balance. Interest rates on credit cards can exceed 18 percent, making an installment loan from a bank or credit union much less expensive if you need to pay the charge off over time.
Potential Issues
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Paying by credit or debit card is safe, although credit cards generally offer greater protection than debit cards. For example, say you pay online and enter $2,000 to be paid instead of $200. If you're using a debit card, the money would be instantly deducted from your checking account, and reversing the charge could take days or weeks. However, some credit card companies can reverse the charge instantly. The Dallas County property tax collector reports on its website that some banks, in an attempt to guard against fraud, may not allow large payments to be made online without speaking to you first.
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