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Saving of the Day: Property Tax

Posted by jenwae on December 13, 2007

Come Dec 10, we are usually in a depressed mood. It’s inevitable; no matter how we try to stuff it out of sight, it will eventually come around. The dreaded blue-white bill with a big yellow printed sum owing  staring back at you – The property tax bill. property-tax-2.jpg

The property tax is payable in 2 installments. The 1st part is due Nov 1 every year but you can resist until Dec 10 to hand over your hard-earned money to the state collector. For tax saving reason (that will be another post), we usually pay our entire dues in the first installment itself by Dec 10.

If your home is in San Diego County, the county allows you to make payment by a credit card. So if you are savvy enough about credit cards, you can use it to your advantage. You can potentially shave a couple of hundreds off your tax bill, in the form of cash rebates from your card. How?

The card issuer levies a convenience fee of 1.88% for charging the tax bill on its card. If your property tax is $5000, that’s an additional $94 service fee incurred on your credit card. However, if your card gives you 2% cash-back (like mine FNBO card does; no annual fee), you get back $100. You “make” $6 profit, or better said, you take $6 off the tax bill.

Before you roll your eyes and say “Come on, it’s a measly $6”, what if you have a 5% cash-back credit card? Yes, with that, you take back $250. Minus the convenience fee, you net $156. And not to mention you can hold off your credit card payment for another 21++ days, so your money can sit in a high-yield online savings account and earn some good interest. A dollar saved is a dollar earned!

The Citibank CashReturns card gives you 5% cash-back on ALL purchases for 3 months (and 1% thereafter). With no annual fee, this card is a runaway winner – for any big purchases!

So, there you go. This is Saving of the Day idea for you – not for us unfortunately, because my wife made the payment by check before I could say “Jack the Ripper”. We will definitely not let this chance go past next year.

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