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Survey Finds Fees Stop Americans from Paying Taxes by Credit Card

by Peter Andrew

Survey

Finds Fees Stop Americans from Paying Taxes by Credit Card

In February we reported that paying

taxes with a credit card is a poor idea, due to the 2.49%

credit card processing fee that you'd be forced to pay. A new

survey from research firm Ipsos Insight shows that these fees

are indeed keeping Americans from using what would otherwise

be a very convenient form of payment.

The

survey of 1,001 people found that while 68% of American adults

know the IRS accepts credit cards, only 1% plan to use a credit

card to pay their 2005 federal taxes.

More than three out of four (78%) said they "definitely will

not" use a credit card the next time they owe federal income

taxes. However, if the service were free, 23% of those open

to the concept would use it.

According

to Doug Cottings, Senior Vice President with Ipsos Insight's

Financial Services practice, the processing fees associated

with paying taxes with a credit card have defeated the purpose

of making this option available in the first place. "The

fees negate the attraction to credit card benefits such as convenience,

habit, rewards points or payment deferrals. This negative outcome

has effectively destroyed the effort to broaden taxpayer's payment

options through credit card payments."

Published 03/27/06 (Modified 05/07/12)


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