Plastiq review: How to earn more points and pay less fees
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If maximizing points and miles on big purchases is your game, Plastiq can help you get there. The payment platform is popular among those looking to earn rewards on expenses that normally can’t be charged to a credit card. We’re talking about rent and mortgage payments, taxes, tuition, a new car and pretty much everything in between.
A few years ago, I convinced my boss to let me make a $14,000 payment to a vendor via Plastiq. I was trying to meet the spending requirement on The Business Platinum Card® from American Express and this purchase got me there. Not only did I earn a pretty big welcome bonus, but I also earned 21,000 Membership Rewards points since the card earns 1.5x on eligible purchases of $5,000 or more (up to 1 million additional points per calendar year).
But before you get too excited about the miles you’re going to earn paying your kid’s college tuition this spring, keep in mind that Plastiq does charge a fee. There are also restrictions about the type of payments you can make with specific credit cards. I’ll cover some workarounds for these issues along with everything else you need to know about Plastiq.
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What is Plastiq?
Plastiq is a payment platform that allows you to pay and accept pretty much any bill with a debit or credit card. It’s a great option for earning points on spending that you normally can’t put on a credit card. This includes some of your biggest living expenses, like housing, cars, tuition and more.
You can pay these merchants with a credit card and Plastiq will send them a check or wire transfer on your behalf. They’ve recently rolled out Plastiq Accept for small businesses and a global payments solution as well.
You can even set up automatic payments, so you don’t have to worry about scheduling them manually every month.
Plastiq fees and how to avoid them
Plastiq currently charges a credit card processing fee of up to 2.85%. You can offset this fee by signing up with a referral link and referring others to the platform. You’ll earn 100 Fee-Free Dollars (FFDs) for signing up with a referral link or by referring someone who then makes $500 in payments.
While the 2.85% fee can be tough to justify, Plastiq does run occasional promotions that cut down the fee. They’ve sent out targeted offers for reduced fees or bonus FFDs you could apply to future payments in the past.
To make sure you don’t miss out on these promotions, be sure to sign up to receive email notifications from Plastiq. Whether you’re targeted for a special offer or notified of public promotions, signing up for email notifications ensures you don’t miss out on these deals,
The Plastiq referral program
If you have lots of friends and family eager to earn miles on big purchases, you can earn FFDs by referring them to Plastiq. You’ll earn 100 Fee-Free Dollars (FFDs) for every person you refer who makes $500 in payments. Occasionally, you can earn bonus FFDs during a promotion.
Just keep in mind that FFDs expire 90 days after they’re issued. An easy way to ensure these don’t expire is to use them for your mortgage or rent payments every month. These are bound to be high enough to use up any expiring FFDs you’ve got lying around.
The best credit cards for Plastiq bill payments
The best credit cards for Plastiq bill payments are ones that earn rewards that are more valuable than the fees you’re incurring. Using Plastiq to meet spending requirements on a card with a big welcome bonus is another great option. For example, the Ink Business Preferred Credit Card is currently offering 100,000 bonus points after you spend $15,000 on purchases in the first three months after account opening. If you’re having difficulty meeting the spending requirement due to the economic downturn, Plastiq is one option for getting it done.
Similarly, a credit card that offers elite status or annual spending bonuses would also be a great contender for Plastiq bill payments. If the card you’re using earns more than one point per dollar spent, that’s even better.
In the example I shared earlier, I earned 21,000 points plus the welcome bonus from The Business Platinum Card. While a $14,000 payment would incur about $399 in fees, I had plenty of FFDs from referrals to cover the fee.
TPG values Membership Rewards points at two cents each, so 21,000 points are worth $420. I personally wouldn’t use Plastiq to generate the equivalent of a $21 profit. However, it’s important to think about how you’re going to redeem those points. There have been times when 21,000 points got me well over $1,000 in value.
How does Plastiq work?
Plastiq is pretty simple to use. After signing up, you can add credit cards to your wallet and set up payment profiles. You can set up one-time or recurring payments for virtually any merchant. When you make a payment using a credit card, Plastiq pays the merchant via check or transfer.
Since payments can take 1 – 8 days to process, you’ll want to keep this in mind when choosing your payment options.
It’s always a good idea to get mortgage and rent payments in at least two business days before they’re due. Plastiq has a payment calendar that shows you when the payment will post so you can adjust the payment date accordingly. If you’re making a payment last minute, you can pay extra (usually around $8) to get it expedited.
How to add a new recipient in Plastiq
If you’re making a payment for the first time or adding a new recipient, you need to log in and click on the “add a new recipient” button on the left side of the page.
Next, you’ll be asked to enter the recipient’s name and the country where the payment will be sent.
You can choose between sending your payment via paper check, ACH bank transfer, or domestic wire. Wire transfer is the fastest option, while paper checks can take eight business days to process.
Payments by check
If you want Plastiq to send your payment via check, you’ll be asked to provide the recipient’s address.
Finally, you’ll need to specify the services provided by the recipient and their contact information. Options include business purchases, clubs and membership, general inventory, labor and payroll, insurance and more.
ACH and wire
For ACH or wire payments, you’ll need to confirm your account first. This process takes just a few minutes and requires you to provide your phone number and enter a confirmation code received via text.
Once that part is complete, you’ll be prompted to enter the recipient’s name, account and routing number.
Making a payment through Plastiq is straightforward and requires just a few simple steps. Once you’ve added a recipient, you can bypass most of these steps on future payments.
Related: Beginner’s guide to points and miles
Here are some of the most common questions we’ve received about Plastiq:
Which bills can you pay with Plastiq?
Using a credit card, you can pay virtually any bill or merchant through Plastiq. This includes your rent, mortgage, car payments, your landscaper and pretty much anything in between.
The only payment restrictions are for “debt products,” investments or other people. Plastiq is meant to be a consumer-to-business product, so you can’t use it as a Venmo alternative to sending money to friends or family.
Which credit cards does Plastiq accept?
Plastiq accepts all major credit cards, including Visa, Mastercard, American Express, Discover and Diners Club. However, keep in mind there are limitations regarding which bills you can pay with each card type. For example, you can’t use an American Express card to pay your mortgage, but you can use it to pay your rent.
Plastiq has a handy guide that lists all the different bills you can pay with American Express, Visa, Discover and Mastercard.
Can I use Plastiq to pay a credit card bill?
Unfortunately, you can’t use Plastiq to make a credit card payment pay since that falls under the “debt product” restriction. While a mortgage is technically a debt product, Plastiq makes an exception in allowing you to pay it with a credit card. That’s pretty handy since mortgage payments are such a big expense for most people and there isn’t really another way to earn points while paying it.
What are some alternatives to Plastiq?
There are a few alternatives to Plastiq, depending on the type of bill you’re paying. If you’re looking to pay taxes with a credit card, a cheaper option is to go with an IRS-approved payment processor. Many of them accept credit cards for less than a 2% processing fee.
If you’re looking to earn points on tuition payments, check with your University first because you may end up paying a lower card processing fee than Plastiq charges – or none at all.
PayPal is an option for peer-to-peer payments using a credit card. The platform charges 2.9% plus a $0.30 processing fee per transaction. That brings your total for a $1,000 payment to $29.30. This is higher than what Plastiq charges, but it’s an option since Plastiq doesn’t allow peer-to-peer payments.
When is using Plastiq worth it?
With the fees involved, you may be wondering whether Plastiq is worth it. There are a few scenarios where incurring a 2.85% fee makes sense. For starters, if you’re trying to meet a large spending requirement to earn a credit card sign-up bonus, Plastiq might be worth considering. You’ll pay roughly $28.50 per $1,000 payment, which could be worthwhile depending on the sign-up bonus size.
For example, the Ink Business Preferred currently offers 100,000 bonus points after you spend $15,000 in the first three months of account opening. Making $15,000 in payments through Plastiq will cost you about $427.50 in fees. While that’s certainly not a small amount, keep in mind that you can redeem the Ink Preferred welcome bonus for $1,250 worth of travel booked through the Ultimate Rewards Travel Portal. Even if you end up redeeming part of your sign-up bonus for cash-back to offset the Plastiq fee at one cent per point, you’ll still come out ahead.
Of course, our recommendation is to transfer your points to one of Chase’s travel partners for premium award redemptions. In fact, you can get well over $2,000 or more in value by going this route.
Plastiq is a solid option if you’re looking to earn points on big purchases or need a little help meeting a large spending requirement. While the 2.85% fee can be substantial, you can save by signing up with a referral link or referring others. The occasional promotion can also knock a big chunk of those fees out. And if using Plastiq gets you a big credit card sign-up bonus, redeeming it for a high-value award can also take the sting out of paying those fees.
Screenshots courtesy of Plastiq.com
Featured photo by martin-dm/Getty Images
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