One of the best ways to rack up rewards points is with credit cards. The problem for many of us is that there are only so many things we can pay by credit card. That’s where Plastiq comes into play.
I wrote about Plastiq several months ago, but wanted to revisit the value proposition, both due to the frequency with which they’ve been offering promotions, and also due to a recent change in the credit card rewards space (if you’re familiar with the basics of Plastiq already, skip down to the section about whether Plastiq is worth it for the rewards).
Plastiq Bill Pay Basics
Plastiq is a bill pay service that lets you pay virtually any expense by credit card. There are two common reasons people may want to use this:
- Because they value the rewards offered by credit cards
- For cash flow reasons (maybe someone has a 0% intro APR offer on a credit card, and sees this as a good opportunity to pay a bill)
I’m focusing on this entirely in terms of the rewards aspect, since in general I recommend doing everything you can to avoid credit card financing, given how high the fees can be. At the same time, I understand that some people like a 0% intro APR offer on a credit card, so no judgment.
Which Credit Cards Can You Use With Plastiq?
Plastiq allows you to pay with most major credit cards, including those issued by American Express, Mastercard, Visa, Discover, Diners Club, JCB, and Capital One (though Capital One is limited to business cards).
There are restrictions with some issuers regarding what kind of payments can be made, and you can read more about that here.
How Much Does Plastiq Charge?
Plastiq charges a fee of 2.5% for payments made by credit card. Plastiq does frequently offer promotions that can get you a better rate than that, which I’ll talk more about below.
Does Plastiq Have A Referral Program?
The easiest promotion that everyone should be eligible for is Plastiq’s referral program. The rewards currency of the referral program is “Fee Free Dollars” (FFDs). Each FFD is good for one dollar of bill pay without any sort of fees.
If you’re referred to Plastiq by someone you get 500 FFDs, and the person referring you gets 1,000 FFDs. Sometimes they have further promotions offering FFDs.
What Payments Can You Make With Plastiq?
Plastiq allows you to pay for all kinds of things, including (but not limited to) auto leases, auto purchases, business services, club fees, mortgages, contractors, employees, insurance, legal services, rent, tuition, taxes, utilities, and more.
How Does The Process Of Paying With Plastiq Work?
The process of making a payment with Plastiq is easy.
The first step is that you have to add the recipient to your Plastiq account, which includes adding their name, address, preferred payment type (checked, wire, or ACH), and some basic details about the type of payment you’re making.
Then you have to enter your payment amount, which includes entering all your credit card details (if they’re not already saved to your account).
You can save credit card details as well as information about the people you’re paying on your account, and you can even set up a recurring payment.
How Does Plastiq Pay Your Recipient?
Once you’ve gone through the process of submitting the payment, Plastiq will make the payment on your behalf, with the following options:
- You can pay by check, and the check will be delivered within eight business days
- You can pay by wire transfer, and domestic transfers take place same or next day, while international transfers take 1-3 days
- You can pay by ACH bank transfer, and funds can be deposited in the recipient’s bank account as soon as next day
Is Using Plastiq Worth It For The Rewards?
Plastiq opens up a whole new world of credit card payment possibilities, though at the cost of a 2.5% fee. So the question becomes, is it worth generating credit card spending at a cost of 2.5%?
My personal take is that it could be worth generating credit card spend at a 2.5% fee, though it’s not a no brainer across the board.
Let me actually state upfront that I do pay my personal income taxes by credit card. I can do this at a cost of 1.87% through a different service (Pay1040.com), and that’s a price that’s very much worth it to me.
Historically I’d pay taxes with the Chase Freedom Unlimited® (review), since it earns 1.5x points per dollar spent, and in conjunction with the Chase Sapphire Reserve® Card (review) you can get the maximum value out of those Ultimate Rewards points.
Personally I think it’s very much worth picking up Ultimate Rewards points for ~1.25 cents each, as I value them at significantly more (~1.7 cents each).
So, under what circumstances is it worth making payments with Plastiq?
If You Need To Complete Minimum Spending On A Credit Card
It could be worth using Plastiq if you’re struggling to meet the minimum spending on a credit card, but being able to pay expenses by card would help you.
For example, say you get the Ink Business Preferred℠ Credit Card (review), which offers 80,000 Ultimate Rewards points after spending $5,000 within three months. If being able to pay bills by credit card would help you reach that, it could be well worth it.
Paying $125 for the ability to unlock a huge welcome bonus, plus the points you earn for that $5,000 of spending, could very well be worthwhile.
This could even work well for other credit cards with much bigger spending requirements. Take for example the British Airways Visa Signature® Card (review), which offers a bonus of 50,000 bonus Avios after spending $3,000 within the first three months, plus a further 50,000 bonus Avios after spending a total of $20,000 within the first year of account opening.
Say you could easily spend the $3,000, but would struggle to pay $20,000 without using Plastiq. Spending $17,000 with Plastiq would cost you at most $425, but you’d earn a total of 67,000 additional Avios (17,000 Avios for spending, plus 50,000 bonus Avios). I’d say that’s well worth it.
If You’re Unlocking Some Threshold Bonus
There could be huge value in generating incremental credit card spending with a 2.5% fee. In addition to the general return on spending offered by cards, some cards also have threshold bonuses, where you get a further bonus if you spend a certain amount.
To give one example, the World Of Hyatt Credit Card (review) offers a Category 1-4 free night certificate when you spend $15,000 on the card in a cardmember year, plus two additional elite nights for every $5,000 spent.
Let’s say you’re expecting to end the cardmember year having spent $10,000 on the card, and have no easy way of increasing that. It could absolutely be worth using Plastiq for that $5,000 of spending (at a fee of no more than $125) so that you can get a Category 1-4 free night certificate, 5,000 more points, and two more elite nights.
If You Value Rewards Highly/Have Really Good Cards
I’d argue that there are some cards where it could be worth outright generating spending for a 2.5% fee. For example:
- The Blue Business® Plus Credit Card from American Express (review) offers 2x Membership Rewards points on the first $50,000 spent every calendar year
- The Citi® Double Cash Card (review) is technically a cash back card, but in conjunction with a card earning ThankYou points, you could earn 2x ThankYou points per dollar spent
Both of these cards let you generate transferable points for 1.25 cents each, which is significantly below my valuation of 1.7 cents per point. Personally I think that’s a great deal.
If Plastiq Has A Further Promotion
To me this is where the value proposition of Plastiq really comes into play. If you sign-up for Plastiq you’ll constantly be targeted for further promotions, typically offering lower transaction fees.
For example, in September 2019 I was targeted for a reduced 1% fee on up to three payments of $10,000 each.
In October 2019 I was targeted for a reduced 1.5% fee on up to three payments of $15,000 each.
In November 2019 I was targeted for a reduced 1.5% fee on up to three payments of $10,000 each.
Then in late November 2019 I was targeted for an offer to get 5,000 Fee Free Dollars if I made a payment of at least $5,000.
Those are some amazing deals, and they seem to come around constantly. If you’re paying a 1-1.5% fee, that’s like generating ThankYou points with the Citi® Double Cash Card at the rate of 0.5-0.75 cents each.
That’s spectacular, especially if you then transfer points to a ThankYou airline partner when there’s a transfer bonus.
Plastiq is an awesome service to keep in mind in situations where you could use more credit card spending.
On the most basic level, I think Plastiq could be worth it if you’re trying to reach minimum spending on a credit card, or are trying to unlock some threshold bonus.
Even beyond that, though, Plastiq’s standard 2.5% fee can be worth it if making payments with the Citi® Double Cash Card, in my opinion, as that’s like earning ThankYou points for 1.25 cents each.
But it gets so much better than that. For three of the past four months I’ve been targeted for promos offering fees of 1-1.5%, which is incredible. That’s like earning transferrable points for 0.5-0.75 cents each, which is unarguably an amazing value.
So while some may say it’s not worth generating credit card spending for a 2.5% fee, the reality is that Plastiq constantly offers promotions, and at a 1-1.5% fee I think just about anyone would agree it’s a great deal.
At a minimum, it’s worth signing up so that you can start to be targeted for promotions.
Do you use Plastiq? If so, under what circumstances?