NEW YORK (CNNMoney.com) -- American Express cardmembers can now use rewards points to pay their taxes, the credit card giant said Monday.
AmEx (AXP, Fortune 500) cardholders can use the points toward federal, state and local income tax payments when they use one of two Web sites to file their taxes: Pay1040.com and OfficialPayments.com.
But to pay off $5,000 in taxes a cardmember would have to charge $1 million.
That's because it takes a whopping 200 points to pay off just $1 in taxes. And, according to an AmEx spokeswoman, cardmembers typically earn about one point for every dollar charged to their credit card.
"In light of the economy, we wanted to give cardmembers a practical use for their rewards points," said spokeswoman Mona Hamouly.
But given the points-to-tax ratio, it's not clear just how helpful this program will be to consumers.
Generally, rewards points are cashed in for airline miles, dining cards or items in a shopping catalog. For instance, according to the company's rewards Web site, an Apple (AAPL, Fortune 500) iPod mini goes for for 33,500 points, while a $100 Bloomingdale's gift card costs 18,000 points.
A company statement claims this is the first points-for-taxes program of its kind. The Internal Revenue Service did not return a request for comment.
AmEx says it chose to work with the Web sites Pay1040.com and OfficialPayments.com because those two merchants were already in their program -- cardmembers can use their points toward the sites' transaction processing fee, Hamouly said.
|Overnight Avg Rate||Latest||Change||Last Week|
|30 yr fixed||4.23%||4.19%|
|15 yr fixed||3.26%||3.27%|
|30 yr refi||4.22%||4.18%|
|15 yr refi||3.26%||3.26%|
Today's featured rates:
7,000 Ravens fans traded Ray Rice jerseys for one with another player's name. The team gave vouchers after it ran out of replacement jerseys. More
As Occupy Wall Street goes on its debt-abolishing tear, thousands of people across the country are begging them to forgive their loans. More