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Using rewards to pay taxes
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Using rewards to pay taxes

Credit card rewards can now be used to complete other transactions.

American Express allows cardholders to use rewards points to pay federal, state and local income taxes. But there are catches. Using rewards to pay taxes eats up a lot of points quickly. And payments are made by filing taxes via a tax-paying website such as Official Payments, which charges service fees.

Look at redemption rates, says Davidson. They might not be the best use of your rewards points.

On the plus side, some credit cards award points when you use them to pay taxes.


 

 

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