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This mom of 3 paid $6k in taxes with a 0% offer on her credit card—and this is why she'd do it again

Even though it's not usually advised, there are times when charging taxes on your credit card could make sense. CNBC Select breaks it down in a conversation with Ashley Patrick of Budgets Made Easy.

Photo courtesy of Ashley Patrick

With the new tax deadline approaching on July 15, many consumers might wonder how they'll pay the IRS this year. 

You can pay taxes with your credit card, but it usually comes with fees. At minimum, there will be a payment processing fee ranging from 1% to 4%. (The IRS breaks down the fees for each payment processor here.) 

On top of payment processing fees, your credit card will charge you APR unless you pay your balance off at the end of your billing cycle (averaging around 15.78% according to the Fed's most recent data).

But there are times when charging taxes on your credit card could make sense, even though it's not usually advised. CNBC Select spoke with Ashley Patrick of Budgets Made Easy who used a 0% APR offer that came with her Bank of America® Cash Rewards credit card to pay $6,000 in taxes in 2015.

At the time, Patrick had some money in savings, but she didn't want to drain her emergency fund to pay her tax bill. She and her husband wanted to pay it over time, and when she got the 0% offer from her credit card, it gave her the opportunity to pay her taxes interest-free over 18 months (though Patrick and her husband were able to pay it off more quickly). 

Patrick and her husband have since taken steps to ensure they are more financially prepared and rely less on credit cards for big expenses. The couple now has six months' worth of savings, no debt and they pay their credit card balance off every month.

Yet Patrick insists that if she found herself in the same boat, she'd do it all over again. Below, CNBC Select spoke with her to learn why (and under what circumstances) she recommends paying taxes with a credit card.

Why Patrick decided to use a credit card

"My experience using [my credit card] was pretty easy," Patrick says, explaining it prevented her from being really stressed out because she didn't owe money to the IRS and she didn't have to use all of her savings. 

It also inspired her and her husband to overhaul their finances. When they couldn't come up with enough cash to pay their taxes, they decided to get a firm idea of how they were spending and learned how to save more. They cut their dining out budget in half and put that money toward paying down debt.

"Owing the money on the credit card is what sparked my search for debt payoff plans," says Patrick, who went on to pay off a $14,000 car loan and $25,000 worth of student debt promptly after repaying the credit card.

"It was the catalyst that started us on the journey to financial freedom," says Patrick.

Now, Patrick and her husband have six months' worth of savings in an emergency fund. Experts say that putting money into a high-yield savings account is one of the best ways to stay ahead financially because, when unexpected expenses arise, you're prepared.

"Financial freedom to us is not worrying about the next paycheck," explains Patrick. "Not worrying about if my husband loses his job ... Even now with Covid-19, my husband lost 25% of his income and we aren't stressed. That's financial freedom to me."

When you might want to use a 0% APR credit card

If you have to make a large payment you haven't had time to save for — a big tax bill or an emergency expense — a 0% APR credit card, like the the Citi Simplicity® Card or the U.S. Bank Visa® Platinum Card, can be a good back-up.

Keep in mind you need good to excellent credit to qualify for these and other best no-interest cards. And once you're approved you often have to wait for the card in the mail (unless you get a card with instant access).

But if you have limited time, you can check to see if one of your current credit cards has a 0% APR offer in the form of a convenience check, which is what Patrick used. Convenience checks often count as cash advances, which come with their own fees. Make sure to do the math to see if the money you save on interest is greater than what you have to pay in fees.

Options when you can't use a credit card

If using a 0% APR credit card is not an option, another option is a short-term personal loan. (Read more about how to choose between a loan and a credit card.) 

Personal loans have lower average APRs than credit cards (around 9.5% according to the Fed). Your rate is usually fixed, which means that you will make the same monthly payment until the loan is paid off. You can pay back a personal loan over just a few months or up to three years and sometimes even longer. (Longer term lengths typically have higher APRs.)

Getting a personal loan can sometimes be easier than getting approved for a new credit card, something to consider if you have a fair or average credit score. This is particularly important to keep in mind while card issuers are tightening requirements for new credit cards.

Bottom line

Paying taxes with your credit card is not recommended, as it comes with processing fees and the possibility of paying interest if you can't pay off the balance right away. But if that choice is the only one available to you, it could be better than owing the IRS. If you are considering using a credit card to pay taxes on July 15, be sure to double-check APR, map out your debt repayment plan and, like Patrick, look for ways you can revamp your budget, set new savings goals and get motivated to pay off other kinds of debt.

Information about the Citi Simplicity® Card and  U.S. Bank Visa® Platinum Card has been collected independently by CNBC and has not been reviewed or provided by the issuer of the card prior to publication.

Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the CNBC Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.