Tax Payments: For the 2004 tax year, 1.57 million people charged their IRS taxes to a credit card, which is 54 percent more than the previous year (stats according to the Internal Revenue Service). Up to one third used their credit card simply to accumulate points, says Official Payments, one of two companies that process the credit card transactions for the government.

Official Payments and Link2Gov - the two companies that process credit card payments for the I.R.S., extract a 2.49 percent convenience fee from taxpayers to cover the fee charged by the card issuer and to make a profit.

If your credit card issuer rewards you only a 1 percent cash reward, do the math and you'll see you're in a shortage. But, if your credit card company pays the convenience fee for you (which Discover is doing), you could win.

Let's look at examples of how making your IRS payment by credit card may not be beneficial:

Consider Chase Value Miles Platinum Visa: It rewards one point for every dollar spent and requires at least 24,000 points for a domestic airline ticket. In order to earn one ticket, you'd have to pay a $24,000 tax bill. With the 2.5 percent convenience fee, this would cost you $600 to earn the ticket.

But Chase is doubling the miles for each dollar of taxes paid on its United Mileage Plus Signature Visa card, and so is American Express for its Delta and Starwood credit cards.

Instead of $600, you could get a ticket for $298. Be sure to read your card terms and restrictions for using rewards.

H&R Block and MasterCard are also trying to sway taxpayers, by offering an $8.49 rebate for the online version of its TaxCut software if you use a MasterCard debit card to pay your taxes.

Link2Gov waives the fee for users of debit cards, but not many debit cards offer rewards to the cardholder.

(Link2Gov is at pay1040.com or 888-658-5465. Official Payments can be reached through officialpayments.com or 1-877-754-4420.)

A way to avoid the convenience fee, is to use the checks that come with your credit card statement. The fee for their use could be slightly lower; they vary from 2 percent to 4 percent.

Just be sure to read all terms, conditions, review any restrictions, and weigh the pros, cons, and certainly do the math before you use a credit card to make your tax payment.

Calculate withholding and tax online with our free tax calculator. Read for internet filing? Use our recommended free irs tax preparation and filing.