As credit cards are becoming more favored by consumers, vendors are caught in a sticky situation. Credit card processing fees are an expensive pain point for many businesses, and for that reason, some don’t accept credit cards as a form of payment.
As a result, there may be instances where you want to pay a bill with your credit card, but the vendor won’t accept it. This can be frustrating if you’re hoping to meet the minimum spend for a credit card sign-up bonus, or you’d like to use an interest-free credit card to give yourself more time to pay for something like a home improvement project.
If you’re in this situation, consider using Plastiq to help you pay your rent, mortgage payments, tuition, car payments, taxes, utilities, and more. In this article, you’ll learn how Plastiq works, what payment methods you can use, and how to maximize your credit card rewards — as well as the important things to keep in mind when using the service.
- What is Plastiq?
- What payment methods you can use with Plastiq
- What are the most common things people pay with Plastiq?
- How you can maximize credit card rewards by using Plastiq
- Special incentives and fee-free dollars
- Things to keep in mind before you use Plastiq
- How to get started with Plastiq
- The bottom line on Plastiq
What is Plastiq?
Plastiq is described as “a bill pay service for savvy consumers and businesses seeking an edge.” In essence, Plastiq is a service that acts as a middleman in transactions where credit cards aren’t accepted. This service comes in handy when you’re dealing with a company that doesn’t accept credit cards.
The process of using Plastiq is simple:
- Tell Plastiq who needs to be paid with the necessary information (recipient name and bill information, recipient address or direct deposit details, and payment amount)
- Plastiq charges your credit card
- Plastiq sends either a check, wire transfer, or ACH transfer to the recipient you designated
I’ve used Plastiq myself multiple times and it really is that simple.
For its part, Plastiq does charge a standard 2.5% fee per transaction. For example, if you need to pay your taxes with a credit card, your $2,000 tax bill will be charged as $2,050 to your credit card statement. This 2.5% charge is a flat fee — there are no other charges associated with using Plastiq.
Keep in mind, your payment to Plastiq will appear on your credit card statement as a purchase, not as a cash advance. There are also a few caveats when it comes to which credit cards (and other payment methods) you can use through Plastiq.
What payment methods you can use with Plastiq
Plastiq accepts Mastercard, American Express, Visa, Discover, JCB, and Diners Club for payment. However, there are restrictions as to what you can pay for with which card.
For payments made with American Express to a recipient located in the United States, only the following industries can be paid: government, utilities, education, residential rent, and club fees and membership. I tried paying my student loans at my credit union with an American Express card, and I was met with an error message stating I wasn’t able to do so.
For payments made with American Express to a recipient located in Canada, only the following industries can be paid: government, utilities, school, schools K-12, business services, and residential rent.
With Visa, you can pay for anything except your mortgage payment. Mastercard, Diners Club, Discover, and JCB can all be used without restriction.
Along with this payment flexibility on your end, there are options for how the money can be sent to the person or group receiving it. When setting up your payment, you can choose from a check that will be sent via traditional mail, ACH, or wire transfer. Each of these have different time periods for delivery, so be sure to have a conversation with the person or group you’re paying as to how they’d prefer to receive the funds.
What are the most common things people pay with Plastiq?
Plastiq is an incredible service, as it gives people the ability to pay with a credit card when they aren’t able to do so directly with the vendor. For example, not being able to pay your utility bills with a credit card can be quite frustrating. When situations like this occur, Plastiq can come in handy to pay rent, tuition, taxes, car payments, and more. For example, I’ve been able to pay my student loans with a Visa using Plastiq. However, I’ve only done this when I need to complete a minimum-spend requirement for a sign-up bonus (more on this later).
While there’s a charge for Plastiq’s services, it may still be advantageous for you to pay certain bills through Plastiq rather than paying directly. In some cases, even if a vendor accepts credit cards, Plastiq may still pencil out as a better option after you compare the associated transaction fees.
For example, I was able to pay my rent with a credit card at the apartment complex I was living in most recently. However, there was a 3% upcharge to pay the apartment ownership company with a credit card. But I knew if I used Plastiq, I’d only be charged 2.5%. In this situation, my rent was $1,200 per month. At 3%, the fee to directly pay my apartment manager would be $36. With Plastiq, the 2.5% fee added up to only $30. In this instance, Plastiq saved me $6. Over the course of a year’s lease, using Plastiq would save me $72 while also allowing me to keep earning credit card rewards.
Here are some of the things commonly paid for through Plastiq:
- Auto lease or purchase
- Business services
- Club fees
- Legal services
- Rent or lease
- Tuition or student loans
Plastiq’s service is also helpful for people just looking for a bit of interest-free time to make payments. For example, if you’re planning a large purchase but the seller or vendor doesn’t accept credit cards, using Plastiq to buy the product with a 0% intro APR (annual percentage rate) credit card could give you time to steadily pay off that purchase without accruing interest. Paying the 2.5% fee for Plastiq could be worthwhile in this kind of situation.
Plastiq’s service can also be helpful when your financial situation gets a bit tight, and you need to pay a bill immediately. Using a credit card through Plastiq can provide a little bit of breathing space, as it gives you until the end of your credit card statement period to pay your bill. But again, you should always do the math — if you end up carrying a balance on your credit card, you could incur a substantial cost due to the interest rate. This will defeat the value of your credit card rewards and add expense on top of the Plastiq fee.
Lastly, if you’re a business owner thinking of using Plastiq with a business credit card to pay bills, remember that the 2.5% fee is tax-deductible. With potentially very high reward earnings and tax-deductible fees, Plastiq could be a great solution for your business.
How you can maximize credit card rewards by using Plastiq
Use Plastiq to earn a sign-up bonus
Sometimes trying to earn a sign-up bonus for a credit card can be challenging. You never want to spend money you don't need to just for the sake of hitting a minimum-spend requirement. That type of spending defeats the purpose of credit card rewards, as the cost of interest will heavily outweigh the rewards you earn.
But depending on the bonus you stand to earn, it may be worth your while to pay the 2.5% fee and use Plastiq to hit your spending requirement. For example, I was recently trying to complete a welcome offer on the American Express Delta Reserve Card. At the time, the card had a welcome bonus of 80,000 Delta SkyMiles after spending $6,000 in the first three months. I estimated the 80,000 Delta SkyMiles were worth $800 when valued at a conservative one cent per point but could potentially be redeemed for a much higher value.
I was nearing the end of the three months of holding the card and was around $1,800 short to complete the welcome offer. I began to stress about it, but then I decided to just pay my rent using my Delta Reserve Card via Plastiq. The fee I incurred was $45, but that was outweighed by me earning 80,000 Delta SkyMiles. Plus, the Plastiq charge posted on my credit card statement as $1,845, so I earned an extra 1,845 Delta SkyMiles from this transaction. The 1,845 Delta SkyMiles I earned are worth roughly $18. So in all, I spent $45 extra dollars but gained $818 in value.
In this case, the rewards I earned eclipsed the Plastiq fee. But you should always be sure to crunch the numbers for any situation you encounter, as using Plastiq to earn a welcome bonus doesn’t always add up to be worth it.
|Card name||Spending requirement||Best for||What you earn|
|The Platinum Card from American Express||Earn 60,000 points after spending $5,000 in the first 3 months||Someone seeking travel rewards that can be transferred to airlines or hotels||60,000 American Express points (after completing welcome offer); $200 per year in Uber credits; $200 per year in airline fee credits; up to $100 fee credit for TSA PreCheck or Global Entry every 4.5 or four years, respectively; access to the American Express Global Lounge Collection; $100-per-year credit to Saks Fifth Avenue; complimentary Hilton Gold and Marriott Gold Elite status; and access to the Amex Fine Hotels & Resorts Program|
|Hilton Honors American Express Aspire Card||Earn 150,000 Hilton Honors Bonus Points after spending $4,000 in the first 3 months||Someone seeking hotel points and status||150,000 Hilton Honors points (after completing welcome offer), complimentary Hilton Honors Diamond status, one weekend night award each year of card renewal, $250 Hilton Resort statement credit each year, $250 airline fee credit, Priority Pass Select, and travel protections|
Use Plastiq to hit a spending bonus or threshold
When it comes to travel credit cards, sometimes you can receive a special bonus or perk after you spend a specific amount of money. For example, with the Marriott Bonvoy Boundless Credit Card, you can achieve Gold Elite status when you spend $35,000 in the year following your account opening. Or you may be interested in racking up the 110,000 Rapid Rewards points needed to earn a Southwest Companion Pass. Using Plastiq to cover expenses you couldn’t use a credit card for otherwise is one way to easily achieve these types of highly desirable credit card bonuses.
|Card name||Spending requirement||Best for||What you earn|
|Marriott Bonvoy Boundless Credit Card||$35,000 in the year following account opening||Someone who is a frequent traveler seeking status||Gold Elite status|
|Southwest co-branded credit cards||110,000 Rapid Rewards Points||Someone who often travels with a partner or spouse||Southwest Companion Pass|
Use Plastiq when the rewards outweigh the fees
If you’re in a situation debating whether or not Plastiq will work for you, ask yourself this question: Will the rewards I earn outweigh the cost of the 2.5% service charge?
For example, say you are having a company party and are looking to rent a unique, private space. In this example, it’s $5,000 to use the space, but the venue owner doesn’t accept credit card payments. So, should you write a check or get Plastiq to write a check so you can use a credit card?
Let’s say you select the Blue Business Plus Card Credit Card from American Express for the purchase. With this card, you’ll earn 2X Membership Rewards points on business purchases up to $50,000 each year, and 1X points on purchases after that. From here, you can figure if the value of the points earned with this purchase is better or worse than the cost incurred through Plastiq. In this case, the 2.5% fee for your $5,000 payment through Plastiq would be $125. When it comes to the rewards you earn, though, remember you’ll also earn on the 2.5% Plastiq charges you. So, you’ll be scoring points on a $5,125 charge rather than only $5,000.
For this purchase, you’ll earn 10,250 American Express Membership Rewards points, since this card gets you two points per dollar spent. At a value of two cents per point (based on crowdsourced average valuation charts), these points have a cash value of $205. This is higher than the $125 fee incurred for using Plastiq. In this specific instance, using Plastiq would make sense, as you’d essentially be earning $80 by using your card instead of writing a check.
In other cases, it might not make sense to use Plastiq. Here’s the formula you can use to figure out which payment method is best in any given scenario:
- Purchase cost x .025 = X fee from using Plastiq
- (Purchase price + Plastiq fee) x value of one point = Y amount you stand to earn
- Is Y greater than X? If so, Plastiq may be worth it.
Special incentives and fee-free dollars
While incurring the 2.5% fee on all your purchases sounds like a drag, there are times when Plastiq will run incentives offering lower fee rates. For example, in August 2019, Plastiq sent out targeted emails offering up to three individual payments (up to $10,000 each) at a lower 1.5% processing fee instead of the 2.5%. In a case like this, it actually becomes profitable to pay for any of your purchases with Plastiq if you’re using a card like the Citi Double Cash Card, as it earns up to 2% cash back on all purchases. If you’re paying a $100 bill, the 1.5% fee brings your total cost to $101.50. But after you earn the 2% cash back, your cost for that payment will be reduced to $99.47, which is less than the bill was originally.
Plastiq also offers its own reward program where you can earn “fee-free dollars,” sometimes abbreviated as FFDs. These dollars represent the amount of money you can send without being charged the processing fee. As an example, a friend of mine sent me his referral code to use for my very first Plastiq payment. Once I completed this initial payment, I was awarded $500 FFDs. That meant for the next payment I completed through Plastiq, the first $500 didn’t incur the 2.5% fee. In essence, I was able to save $12.50 on my second payment.
To use any FFDs you earn, simply visit the “Rewards & Referrals” section in your member portal to get started. You can score even more of these FFDs by referring your friends and family to the service using your referral link, which can also be found in the same rewards and referrals section. Be aware that these fee-free dollars expire 90 days after earning them.
Things to keep in mind before you use Plastiq
Before diving into Plastiq, be sure to get familiar with the service. Each payment method you can choose from has different timelines, so look into each to find which works best for you and the person receiving the money.
For example, if you want Plastiq to pay a recipient by check, the service takes at least eight business days to get the check to your recipient. A wire transfer can be completed as quickly as the same or next day for domestic transfers, while international wire transfers will take one to three business days. For an ACH bank transfer, it can be as quick as the next day. So planning your bills ahead of time will be necessary to effectively use this service.
How to get started with Plastiq
To begin, simply visit Plastiq.com to sign up for your account. Once you register for the service, you can get started by sharing your referral code with others. The more people you refer to the service, the more FFDs you can earn.
When you’re ready to pay your first bill through Plastiq, be sure to have a recent billing statement or contact information for the recipient. Depending on how your recipient wants to receive their payment, you may also need bank account information or wire routing instructions.
The bottom line on Plastiq
Plastiq is an easy-to-use bill pay service that enables you to use your credit cards to pay vendors or recipients that don’t accept credit card payment.
This service is great for someone who doesn’t carry a balance on their credit cards and is looking to make the most of their credit card rewards. It’s relatively easy for anyone to negate the 2.5% Plastiq fee through points or cash back earned with the right rewards credit card.
Even if you’re not into credit card rewards, Plastiq is still a great service to have ready to go in case you need to pay someone who doesn’t accept credit cards — or you literally want to buy a little time to pay some bills.
Whether you want to earn points or miles for your next vacation, score cash back to help your bottom line, or simply get your bills paid, Plastiq is a simple and convenient service.