Buying miles and points from the IRS: debit cards


UPDATE: This post is out of date. Please click here for up-to-date coverage of paying taxes by credit card, debit card, or gift card.

If you have large estimated or year-end tax payments you’ve probably wondered if you could profit by paying your taxes with a rewards-earning credit or debit card.  The answer is unequivocally “yes”.  The trick is to make sure that the benefits you get from your card outweigh the tax payment fees.  Here is a chart (provided by the IRS) that shows the fees associated with paying taxes via credit or debit card.  The fees shown below are subject to change, so please see this web page for the latest rates.


As you can see above, debit card fees are as low as $2.99 per payment (regardless of the size of the payment), so debit cards are often the best deal.  Visa and MasterCard payment fees are as low as 1.88% at, whereas American Express and Discover fees are only slightly more expensive at 1.89% via

Debit cards

As long as your tax payment is $160 or more, you’ll pay less in fees by paying with a debit card instead of a credit card.  The larger your tax payment, the smaller the debit card fee is as a percent of the total.  Unfortunately, very few debit cards today offer rewards for debit transactions, but there are a few.  Here are the debit cards that currently offer airline mile rewards:

  • Suntrust Delta Debit Card: Offers 1 mile per dollar spent.  $75 annual fee plus monthly fees unless you maintain a balance of $3K or more. Million Mile Secrets provides more information about this card here.  You can also read about my frustrating experience with the card here.
  • UFB Direct Airline Miles Debit Card: Offers 1 American Airlines mile per every 2 dollars spent.  There is no annual fee, but there is a $1500 transaction limit.  Million Mile Secrets provides more information about this card here.

Until recently, Bank of America offered an Alaska Airlines debit card, but, unfortunately, they have stopped issuing the card.

Cost Per Mile

Let’s assume you have four quarterly estimated tax payments of $1,000 each.  We can then calculate your cost per mile with each card.  Annually, you would pay $2.99 x 4 = $11.96 in tax processing fees, plus you would pay debit card annual fees (if any).  Here is the cost to buy miles with each card:

Suntrust Delta Debit Card (assuming you maintain a $3K balance):

  • Fees: $75 annual fee + $11.96 tax payment fees = $86.96
  • Miles earned: 4,000
  • Cost per mile: 2.2 cents


UFB Direct American Airlines Debit Card:

  • Fees: $11.96  tax payment fees
  • Miles earned: 2,000
  • Cost per mile: .6 cents

For relatively small tax payments like these, the Suntrust card offers poor value (unless you use the card for many other debit transactions as well).  The UFB card offers good value, but very few miles.  Let’s look at what happens when tax payments increase:

Quarterly Payments

Suntrust Fees

UFB Fees

Suntrust total

UFB total

$1000 $86.96 $11.96 4000 miles @ 2.2 cents each 2000 miles @ .6 cents each
$2000 $86.96 $11.96 8000 miles @ 1.1 cents each 4000 miles @ .3 cents each
$2500 $86.96 $23.92* 10,000 miles @ .87 cents each 5000 miles @ .48 cents each
$5000 $86.96 $51.96 ** 20,000 miles @ .43 cents each 10,000 miles @ .52 cents each
$10,000 $86.96 N/A 40,000 miles @ .22 cents each N/A

* Due to UFB’s $1,500 transaction limit, for a $2500 tax payment, it would be necessary to make two payments per quarter instead of just one.  This would double the required fees.
** Due to UFB’s $1,500 transaction limit, for a $5000 tax payment, it would be necessary to make four payments per quarter.  Since each service only allows two payments per quarter, it would be necessary to use two separate services: at $2.99 per transaction and at $3.48 per transaction.


The math for the Suntrust card is pretty simple.  The more you use the card, the less the per mile cost becomes.  So, for very large tax spenders, the Suntrust card is clearly a great deal.  The UFB card is more complicated.  From a cost per mile point of view, it looks like a great option regardless of the size of your tax payments.  However, unless you have very large tax payments (and/or many other qualifying debit charges), the number of miles earned is small.  But, as your tax payments get larger, the process becomes more complicated because you would need to split your payments in order to fit under UFB’s $1500 transaction limit.


With no annual fee, the UFB card is pretty good, but its $1500 transaction limit really limits its value.  If your sole purpose for getting the card is to make tax payments, then it hardly seems worth it.  If you have small tax payments, then you’ll earn so few miles that its hardly worth the trouble of signing up for a new account.  If you have large tax payments, then you would do better with the Suntrust card.

What if earning Delta miles isn’t your thing?  Stay tuned for analyses of opportunities to buy miles from the IRS using credit cards and/or prepaid debit cards.

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