Can you pay your taxes with a credit card?

Can you pay your taxes with a credit card?

If you owe money to the Australian Tax Office, or if you’re a sole trader or self-employed, you may be wondering if you can pay your taxes with your credit card.

And if you’re an avid points chaser, you may also be wondering if you can earn rewards points when using your credit card for ATO transactions.

As we’ve entered the new financial year, now is the time to work out the finer details on your tax before you lodge your return and/or pay any outstanding debts.

Can you use a credit card to pay your taxes?

Yes, you can use your credit card to pay the ATO. It accepts Visa, MasterCard and AMEX. Just keep in mind that any payments you make may have fees associated, and these vary depending on your card type.

ATO credit card fees:

  • MasterCard domestic – 0.18%
  • MasterCard international – 2.20%
  • Visa domestic – 0.38%
  • Visa international – 2.20%
  • American Express – 1.45%

As you can see, there are some savings involved if you use a domestic Visa or MasterCard for payments with the ATO. Using an AMEX or an international credit card carries significantly higher fees, so if you can avoid doing so, this may keep costs down.

Can I earn credit card rewards points by paying my tax?

A select few credit cards will allow you to earn rewards points on your credit card when paying for your taxes. The credit card providers may offer a lower earn rate per dollar spent when making a transaction with the ATO or other government bodies, so keep this in mind if you are points chasing.

To know if your credit card allows you to earn rewards points for transactions with the ATO, you will need to check the terms and conditions on your credit card. These are kept on your card provider’s website. A simpler way to find out if your card allows this is to contact the provider’s customer service team via phone, email or online chat.

AMEX credit cards generally do allow you to earn rewards points on your tax, but they do come with lower earn rates for any government purchases.

AMEX card earn rates for government spending

Card provider Credit card Government spend earn rate Regular earn rate
American Express Essential Credit Card



American Express Qantas American Express Ultimate Card



American Express Qantas Premium Card



American Express Qantas Discovery Card



American Express Explorer Credit Card



Westpac Altitude Black Bundle (Altitude Rewards)



Westpac Altitude Black Bundle (Qantas Rewards)



Westpac Altitude Platinum Bundle (Qantas Rewards)



Westpac Altitude Platinum Bundle (Altitude Rewards)



Source: Data accurate as at 29.07.2020.

What are the risks of using your credit card to pay your tax?

Just like with any purchase on your credit card, using your card to pay for your taxes does come with its own risks.

You will need to keep in mind that even though it is a government transaction, you will still be charged interest on the purchase if you do not pay your statement in full that billing cycle. And if your tax debt is particularly big this year, or if your credit card comes with a moderate or high interest rate, the impact of interest on that purchase may seriously sting.

In fact, if your tax debt is higher than expected, there are alternatives to using your credit card to pay it off, including:

  • Considering a personal loan

If you’re looking to pay off this debt with your card and know you don’t have the funds to pay for it right now, it may be worth considering taking out a personal loan instead. This is because personal loans typically offer lower interest rates than credit cards. However, going into debt to pay for another debt isn’t necessarily the best financial situation to begin with, but if you have no choice, it is always worth doing your research.

  • Talk to the ATO about a payment plan

You won’t be the first person with a big tax debt, and you won’t be the last. The ATO is equipped to deal with these scenarios and may be able to assist you financially through making a payment plan. This way your debt is broken up into much smaller, manageable repayment amounts.

  • Talk to a financial adviser

If you’re struggling to make heads and tails of your finances, it may be worth reaching out to a financial adviser to get you through this difficult time. ASIC’s MoneySmart website offers a range of resources around how to choose a financial adviser.

How to pay the ATO with a credit card

The easiest way to pay the ATO with your credit card is to hop onto the ATO’s website with your credit card handy and follow the prompts on its ‘how to pay’ page.

The ATO does offer other payment methods, including BPAY. You can link your credit card to your BPAY account, but keep in mind that BPAY transactions typically do not earn rewards points. Further, some card providers charge interest on BPAY purchases at the cash advance rate, not the purchase rate, which may be higher.

If you want to pay the ATO via BPAY:

  • Biller code: 75556
  • Reference: your payment reference number

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Learn more about credit cards

How to pay a credit card

There are a few ways to pay a credit card bill. These include:

  • BPAY - allows you to safely make credit card payments online.
  • Direct debits - set up an automatic payment from your bank account to pay your credit card bill each month. You can choose how much you want to pay of your credit card bill when you set up the auto payments.
  • In a branch.
  • Via your credit card provider's app.

What should I do if my ANZ credit card has expired?

Your ANZ credit card is considered expired only after the last day of the month and year marked on your card. For instance, if your card’s expiry date reads 03/22, it is valid until 31 March 2022 and expires on 1 April 2022. Typically, you should have received a new credit card by that date, and you won’t have to request a new card. 

Once you get the new card, you should remember to switch any automatic payments you have - such as a utility or mobile phone bill - from your expired credit card to your new credit card. Equally, if you are using CardPay Direct to repay your ANZ credit card debt, you may need to update the credit card account details for that service as well. 

In case the new card doesn’t arrive by the expiry date of your current credit card, you can call ANZ on 13 22 73 to find out the reason and if you need to request an expedited card. Please note that if you were planning to close your credit card account or request a credit card upgrade, you may need to call ANZ at least before the 25th of the month your current credit card expires in, as that’s when they may send you the new credit card.

How do you use a credit card?

Credit cards are a quick and convenient way to pay for items in store, online or over the phone. You can use a credit card as a cashless way to pay for goods or services, both locally and overseas. You can also use a credit card to make a cash advance, which gives you the flexibility to withdraw cash from your credit card account. Because a credit card uses the bank’s funds instead of your own, you will be charged interest on the money you spend – unless you pay off the entire debt within the interest-free period. If you pay the minimum monthly repayment, you will be charged interest. There are many different credit card options on the market, all offering different interest rates and reward options.

What should you do when you lose your credit card?

Losing your credit card is a serious situation, and could land you in financial trouble. Here is a simple guide detailing what to do when you lose your credit card.

Lock you card – Contact your provider and inform them about your lost credit card. From here lock, block or cancel your card.

Keep track of transactions – Look out for unauthorised credit card transactions. Most banks protect against fraudulent transactions.

Address recurring charges – If your card is linked to recurring charges (gym membership, rent, utilities), contact those businesses.

Check credit rate – To ensure you’re not the victim of identity theft, check your credit rating a month or two after you lose your credit card.

Can I transfer money from my American Express credit card to my bank account?

If you’re an American Express credit card customer, you may not be able to transfer money from your credit card to your bank account. However, you may be eligible for cash advances, which involves withdrawing money through an ATM. 

To qualify for a cash advance, you’ll likely have to enrol for American Express Membership Rewards. Consider checking your online credit card account to see if you can withdraw a cash advance and, if so, the fees and charges you’ll incur for this transaction. 

You should remember that cash advances are different from balance transfers, which were available with some American Express credit cards earlier. Balance transfers allow customers to consolidate debt from high-interest credit cards to a credit card offering a lower interest rate. If you only recently applied for an American Express credit card, balance transfers may not be available irrespective of the card you own. 

How do you use credit cards?

A credit card can be an easy way to make purchases online, in person or over the phone. When used properly, a credit card can even help you manage your cash flow. But before applying for a credit card, it’s good to know how they work. A credit card is essentially a personal line of credit which lets you buy things and pay for them later. As a card holder, you’ll be given a credit limit and (potentially) charged interest on the money the bank lends you. At the end of each billing period, the bank will send you a statement which shows your outstanding balance and the minimum amount you need to pay back. If you don’t pay back the full balance amount, the bank will begin charging you interest.

Should I get a credit card?

Once you've compared credit card interest rates and deals and found the right card for you, the actual process of getting a credit card is quite straightforward. You can apply for a credit card online, over the phone or in person at a bank branch. 

What should you do if your credit card is compromised?

Credit card fraud is a serious problem. If your credit card is compromised and you’re wondering what to do, here are a few precautionary steps to take.

Contact you credit provider – Get in touch will your credit card provider. If you feel your card has been compromised, you should be able to lock or block it.

Monitor your accounts – Keep an eye on your credit card accounts. Any unauthorised transactions could be a sign your credit card has been compromised.

Check your credit rating – It’s also important to check your credit rating, to ensure you’re not a victim of identity theft or some other financial mischief.

How do I apply for a BOQ credit card limit increase?

If you’re an existing BOQ customer, you can request a BOQ credit card limit increase over a phone call. However, you should remember that owning and using a credit card is a matter of financial responsibility, so it might be worth thinking this decision through. 

When requesting a credit card limit increase, you’ll need to be just as responsible in terms of how much you earn and can set aside to repay the outstanding card balance. A credit card company may approve a credit limit increase only if you can show that you have either the income or the disposable income, which is the amount you have left after all expenses have been paid out.

For this purpose, you may need to submit your latest income documents and bank statements for an increase. You may want to estimate how much you usually have left after deducting your expenses, and then use this amount to try and convince the credit card company. Also, you may prefer to pay off the card balance in full each month and thus avoid paying interest on the card, helping you back up any claims of financial responsibility, as well. 

Remember that you may not be able to apply for a credit card limit increase beyond any limitations on the type of card you own. For instance, if you own a card whose ceiling is $10,000, and your current limit is $5,000, you won't likely be able to apply for a $10,000 credit card limit increase.

Does ING increase credit card limits?

You may want to increase your credit card limit for many reasons, such as having access to more spending money. However, if you are using the Orange One credit card issued by ING, you may not be able to do so. 

ING customers can choose a credit limit of their preference when applying for the Orange One credit card. Depending on your financial situation, this limit can be anywhere between $1,000 and $30,000. If you qualify for a Rewards Platinum card, the minimum credit card limit will likely be $6,000. 

Ideally, you should set your credit card limit knowing how much you can afford to repay each month and keep your expenses lower than this level. With most credit cards, you should have the option of requesting a credit card limit increase at a later time, although you will need to qualify for any increase. With an ING credit card, limit increases are out of the question (at the time this was published), which means you may want to apply for a higher credit card limit from the beginning. Remember that you have the option of decreasing your ING credit card limit at a later time.

How to pay a credit card from another bank

Paying or transferring debt from one lender to the other is called a balance transfer. This involves transferring part or all of the debt from a credit card with one lender to a credit card with another. As part of the process, your new lender will pay out the old lender, so that you now owe the same amount of money but to a new institution.

Many credit card providers offer an interest-free period on balance transfers to help new applicants better handle their debt. During this period, cardholders are not required to pay interest on the debt they brought over from the other card. This can be a great opportunity for consumers to pay off credit card debt with no interest. There are often fees associated with balance transfers; normally, these are a percentage of the amount transferred.

So make sure you read the terms and conditions of the card before transferring any debt across.

How to get a credit card for the first time

A credit card can be a useful financial tool, provided you understand the risks and can meet repayment obligations.

If you’re a credit card first-timer, review your options. Think about what kind of credit card would suit your lifestyle, and compare providers by fees, perks and repayments.

Once you’ve selected a card, it’s time to apply. Credit card applications can generally be completed in store, online or over the phone.

When you apply for a credit card for the first time, you must meet age, residency and income requirements. As proof, you must also provide documentation such as bank account statements.

What is a balance transfer credit card?

A balance transfer credit card lets you transfer your debt balance from one credit card to another. A balance transfer credit card generally has a 0 per cent interest rate for a set period of time. When you roll your debt balance over to a new credit card, you’ll be able to take advantage of the interest-free period to pay your credit card debt off faster without accruing additional interest charges. If your application is approved, the provider will pay out your old credit card and transfer your debt balance over to the new card. 

How do you apply for a credit card?

You can apply for a credit card online, over the phone or in person at the bank. Once you’ve compared the current credit card offers, the application process is quick and easy. Before you get your application started, you’ll need to gather your personal information like proof of ID, payslips and bank statements, proof of employment and details of your income, assets and liabilities. To be eligible for a credit card, you’ll need to be an Australian citizen over 18 and earn a minimum of $15,000 each year. Once you’ve applied for a credit card, you should get a response fairly instantly. If your credit card application has been approved, you should receive a welcome pack with your new credit card within 10-15 days.