One of the primary ways in which credit cards can impact your income tax is through the rewards and benefits that they offer.  

Many credit card companies provide rewards programs that allow users to earn points or cashback on their purchases.  

These rewards are considered taxable income by the IRS and must be reported on your tax return. 

Depending on the number of rewards earned, they could potentially push you into a higher tax bracket, resulting in a higher tax liability.

Another way in which credit cards can affect your income tax is through interest charges.  

If you carry a balance on your credit card and are charged interest, you may be able to deduct the interest paid on your tax return. 

However, there are limitations to this deduction, and it only applies if the interest is related to a business or investment activity.

Credit card fees, such as annual fees and late fees, are generally not deductible on your tax return.