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If you’re into credit card rewards, you know that the more you charge to your rewards card, the more points, miles or cash back you’ll earn. Over time, every little bit can add up to impressive rewards that might earn you elite status or even a free trip.
Traditionally, however, there are certain expenses that you can’t pay with a credit card, like rent or mortgage payments. Some establishments, like utility companies, charge 3% or more to pay with a credit card. Enter Plastiq, a new bill pay service that works around these issues, so you can pay with your credit card and earn as many rewards as possible.
Using a service like Plastiq is also one of the most popular ways of meeting the minimum spend requirement for credit card bonuses. Popular cards like the Barclaycard Arrival® Plus and Capital One Venture have great sign-up bonuses that require a minimum spending amount within the first few months to nab the bonus.
What Is Plastiq?
There are certain things that you normally can’t charge to your credit card, like rent, tuition, auto lease, and mortgage payments. With Plastiq, however, it’s possible. When you open a free account, all you have to do is add a credit card, enter a payee with bill details, and schedule a payment. Plastiq will take care of the rest. The bill pay service will send a check to the recipient of your choice, and charge that expense to your credit card. Plastiq can also handle wire transfers or ACH transfers depending on the recipient.
Why would you want in on this? Because you’ll be able to earn rewards on these charges. Paying directly via bank transfers or by personal checks has zero earning potential.
Plastiq charges a 2.5% processing fee for credit card, prepaid card and gift card payments, and 1% for debit card transactions. From time to time, you’ll find promotions extending lower fees, certain conditions may apply.
How to Maximize With Plastiq
With a 2.5% charge for its service, you have to think a little critically to make Plastiq work for you. Any instance in which you choose to use Plastiq should justify that 2.5% service charge.
Below are three instances where paying with Plastiq can be a smart move, maximizing your rewards to give you as much earning power as possible.
When the Rewards Exceed 2.5%
If the rewards outweigh the service charge, then using Plastiq makes sense. Say you have a card that offers net rewards of 3% for the first year, such as the Discover it Miles (1.5x miles on all purchases + end of the year bonus match). After Plastiq’s 2.5% processing fee, you’re left with rewards of 0.5%. That might not seem a lot, but it’s still better than nothing.
When You Need to Reach a Minimum Spending Requirement
Since we here at MoneysMyLife love bonuses, this is one of the best reasons for taking advantage of Plastiq. Good rewards credit cards will offer juicy welcome bonuses, but they usually come with minimum spending requirements.
|Credit Card||Sign-up Bonus (*Subject To Change)||Minimum Spend Required|
|Barclaycard Arrival Plus||60,000 points ($630)||$5,000 in the first 3 months|
Consider the example above. There are some high spenders that can easily manage $5,000 in purchases in three months. Those that don’t spend a whole lot might have a hard time reaching the minimum threshold, unless they can charge big expenses like rent or mortgage payments onto their credit card. If you fit into the latter group, you’ll find that Plastiq’s 2.5% fee would be easily worth the bonus.
|Amount Charged With Plastiq||Service Fee (2.5%)||Bonus Worth|
Above is assuming you’d use Plastiq for the entire minimum spending requirement. In reality, this likely wouldn’t be the case.
When You Want to Earn Status
Some co-branded hotel cards offer status perks to cardholders who meet certain spending requirements.
|Credit Card||Gold Status Annual Requirement|
|Starwood Preferred Guest||$30,000 in qualified purchases|
Of course, I don’t recommend you pay the total of $30,000 in bills with Plastiq to get your Gold status. That equals to $750 in Plastiq fees, which isn’t worth the elite membership. However, it might make sense to use the bill paying service if you’re getting pretty close to the $30,000 mark, and you need just a bit of additional spending to reach that threshold.
Important Cash Advance Note
If you’re concerned about cash advance fees, it shouldn’t be an issue via Plastiq because most transactions will appear as ordinary purchases, and they’ll earn you points towards spend requirements. Every once in a while, you might get a popup which gives warning to cash advance fees. This happens with certain Visa cards and only when you pay a payee for the first time. To get around this, if possible, make your first payment to the recipient with a Mastercard, Amex or Discover card, even if it’s just a tiny sum. Afterwards, you can switch to your Visa card without having to pay that cash advance fee.
Another route is to contact Plastiq directly and ask to add the payee into their system, so it’s an “existing” payee when you make the transaction. If you don’t get the red warning message, then it’s safe to assume you won’t be charged a cash advance fee.
Get “Fee Free Dollars” when you refer a friend. Not only will the new member get a bonus of $500 in fee-free processing, but you’ll also get $1,000 in free processing. If you do the math, that means you’ll save $25, and your friend $12.50, in processing fees.
It’s important to note, that your friend must make $500 in payments before the next $500 is fee-free. Once the new member meets the threshold, then the “Fee Free Dollars” will be activated.
You’ll be able to make referrals via email, Facebook, Twitter, or with your own personal referral code. Use my referral link below to get 500 FFDs ($500 in fee-free processing). Thank you in advance!
Enter your email after using the above link, confirm via the email you’ll receive, then you’ll see this screen to finish the sign-up process:
Plastiq works with Visa, Mastercard, Discover and American Express credit cards. This includes debit cards as well. It also allows Mastercard, Amex and Visa gift cards as a form of payment. All you have to do is use your address as the billing address, and you won’t be subject to a one dollar hold on the card when Plastiq processes the the transaction.
Mastercard and Discover can be used for all payees, including mortgage payments. Visa works for almost all payees, except for mortgages. You’re good to go on everything else, though.
Amex can only be used for certain payees, including government, utilities, education, residential rent and club fees and membership. Amex cannot be used for mortgage payments, car or loan payments, vendor payments for your business, or commercial real estate rent. To check for eligibility, input the payee in the Plastiq system to see if the transaction is possible.
- Works with small business to pay contractors, caterers, gardeners, accountants, lawyers, therapists and more. In some cases, you might need verification with an invoice from a payee.
- Check or Automated Clearing House (ACH)
- Any payee you add yourself, which is not already in the Plastiq system, will receive a check.
- Payees already in the Plastiq system are paid via check or ACH.
- All federal tax payments are paid with checks.
- When sending a payment, you’ll have the opportunity to put your account number or any pertinent information in the Memo field.
- Check payments take about two weeks to get to the payee. ACH payments only take approximately one week.
- You have the ability to set up a monthly recurring payment for your rent, mortgage, loan and more.
- Check payments expire in 30 days.
- Plastiq has expedited payment options in order to guarantee delivery within two business days. Plastiq’s Accelerated Payments Suite now includes:
- Expedited check delivery
- Standard & expedited ACH bank transfers
- US domestic wires.
For most bills, Plastiq is the easiest and cheapest way of paying with a credit card. It won’t be worth it for ordinary spends, but it’s a great method to reach spending requirements or to compile specific rewards. Plastiq works with many kinds of bills and credit cards, and its 2.5% fee is reasonable.
To make sure that Plastiq is helping you rather than hurting you, you have to do the math. Make sure that the fees aren’t more than the rewards you’ll be earning.
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