Pros And Cons Of Using Your Credit Card To Pay Your Personal Income Tax Bill (Via CardUp)

We all know that taxes help fund important government expenditures that we all benefit from. This benefits many people in Singapore, who stand to receive more in public grants, transfers and subsidies than the taxes they pay.

But, the yearly ritual of paying our personal income tax bill is not unlike undergoing a medical check-up. You understand that it is good for you, but it’s still unpleasant. Since personal income tax is an expense we need to pay anyway, we figured why not earn some credit card rewards while we contribute to nation-building?

Here’s where CardUp comes in.

Watch: Taxes Are Essentially Wealth Transfers From The Richer To The Not-So-Rich. So Why Do Most People Like Us Hate It So Much?

How To Use Credit Cards To Pay Your Personal Income Tax Bill To IRAS

According to IRAS, the only accepted methods for paying your income tax bill are GIRO, PayNow QR, AXS, SAM, internet banking, an ATM, or NETS at any SingPost branch.

However, the folks at CardUp have devised a totally legal way to allow you to pay for your income tax using your credit card, for a small fee.

For income tax payments scheduled between now and 31 August 2024, new or existing Cardup users can enjoy a 1.75% fee instead of the usual 2.6% CardUp fee. Redeem the DNSTAX24 promo code on CardUp. This offer applies to Visa and China UnionPay credit cards and is limited to one redemption per user. Terms and conditions apply. The due date of tax payments must be 25 March 2025 at the latest.

New users (or users who have not made a payment before) can also enjoy $30 off the standard 2.6% CardUp fees if they redeem the DNSFREE promo code on CardUp. This means you can make your first income tax payment of over $1150 for free.

Aside from income tax, you can also use CardUp for recurring bills like rental payments, stamp duty payments, insurance premiums, renovation and car loans, or foreign domestic worker salaries, to name a few.

Read Also: The Pros And Cons Of Using CardUp For Your Recurring Bills

#1 Fulfil Qualifying Credit Card Spend Requirement For High-Interest Savings Accounts

Many high-interest savings accounts today require a minimum qualifying spend to unlock higher interest payments. By using CardUp, you can now pay your income tax and other payment types that were previously not paid with credit cards so that they count towards the qualifying spend that you need.

Read Also: [2021 Edition] Best Savings Accounts for Working Adults in Singapore

#2 Clock Up Credit Card Spend To Qualify For Bonus Miles Or Other Rewards

Certain credit cards offer bonus welcome air miles or cashback credit if you charge a certain minimum amount within the first few months.

CardUp allows you to clock up the spending even on payments you may not have been counting towards credit card spending.

Furthermore, with the uncertain economic situation, you might be rightly reluctant to go out of your way to make fresh expenditures on new items, while your income tax bill is something you already need to pay for.

#3 Take Advantage Of Promotional CardUp Fees

In the past, the 2.6% fee charged by CardUp was a point that required careful calculation and planning, since it only makes sense if the benefit that you get from your credit card spend must be higher than the fee you pay.

However, in addition to the initial $30 off CardUp fees on your first payment when using the Promo Code DNSFREE, you can also look out for promotional rates that CardUp regularly offers.

However, given the lower 1.75% fee you can get if you pay your income tax this year via CardUp, it will be much easier to extract credit card benefits by paying through CardUp, which is worth more than the additional fees you have to pay.

Read Also: Complete Guide To Filing Your Personal Income Tax In 2023

Are There Disadvantages Of Using CardUp For Your Income Tax Bill?

The obvious disadvantage of CardUp is the processing fee you’ll be paying. As mentioned earlier, the monetary value of the air miles, cashback or bonus interest you earn must be higher than the CardUp fee you’ll be paying.

To help you evaluate whether it is worth it for you, CardUp has a handy calculator on their website that you can use.

Another potential issue you might face is that CardUp uses variable Merchant Category Codes (MCC), which means you cannot use it to hit a specific type of spend reliably. However, the CardUp team will be happy to assist you if you have any questions.

Read Also: Credit Card Merchant Category Codes (MCC): Here’s How It Affects Your Rewards – And How To Find Out MCC Of Your Favourite Vendors

Earn Rewards On Your Personal Income Tax Payment And Other Bills Today

The combination of geopolitical and economic uncertainties will make us rethink our spending plans, and CardUp’s promotional rates for paying our income tax bill to IRAS make it a really compelling option right now.

You can visit CardUp for more information and sign up for a free CardUp account to begin using it to settle your recurring bills, pay your landlord or foreign domestic helper, and fulfil your duty as a responsible tax-paying citizen.

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