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Update: Some offers mentioned below are no longer available. View the current offers here – The Business Gold Rewards Card from American ExpressCitiBusiness / AAdvantage Platinum Select World Mastercard

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Putting as many business expenses as possible on a rewards credit card has the net effect of making your operating expenses cheaper if you put the rewards back into your business. Your travel expenses may shrink by 3% or more if you use the right credit card, while you could save 5% on office supplies and advertising when you choose a card that includes this type of spending in its bonus categories.

One example is The Business Gold Rewards Card from American Express, which earns 3 points per dollar on one category from a list of five options — airfare purchased directly from airlines, US purchases for advertising in select media, US purchases at gas stations, US purchases for shipping and US computer hardware, software, and cloud computing made directly from select providers — up to $100,000 per year. Another is the Ink Business Cash Credit Card, which pays 5% cash back on the first $25,000 spent in combined purchases at office supply stores and on internet, cable and phone services each account anniversary year (then 1%).

Unfortunately, you can’t put everything on a credit card — including some of your biggest monthly expenses like rent, contractor payments and vehicle lease payments. You can, however, run these budgeted expenses through an online payment service like Plastiq, which allows you to pay for things you normally wouldn’t be able to with a credit card. (Plastiq cuts a check or initiates a bank transfer to the recipient.)

Among the expenses Plastiq says you can pay for with its service are several that are likely part of your monthly business budget, including car payments, contractors, insurance, legal services, rent and utilities.

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Paying these recurring expenses with Plastiq normally wouldn’t produce any savings for you or your business, as Plastiq charges a 2.5% transaction fee on all credit card payments. That fee is more than you’re likely to earn in rewards for using your card. It’s why we typically recommend that businesses and consumers put these expenses on a credit card only if they need to boost spending to earn a sign-up bonus or to hit an annual bonus.

But the service is waiving its fee on transactions up to $250 if you use Masterpass to initiate a Plastiq payment. Fees will be waived for payments delivered through September 30, 2018. Although Masterpass supports non-Mastercard products, the Plastiq promotion is good only on Mastercard-branded cards used through Masterpass.

This is both good news and bad news, as there are fewer restrictions on Mastercard cards than there are for other processors, like Visa, which cannot be used on Plastiq to make mortgage payments. However, not many of the top business credit cards are branded as Mastercard. Two notable exceptions are:

  • The CitiBusiness / AAdvantage Platinum Select World Mastercard, which pays 1 AAdvantage mile per $1 spent on non-bonus category purchases, which is how Plastiq payments would be coded. AAdvantage miles are worth 1.4 cents apiece, according to TPG’s latest valuations. The CitiBusiness AAdvantage is also currently offering for a limited time a 70,000-mile sign-up bonus after spending $4,000 in the first 4 months you have the card.
  • The Bank of America Business Advantage Travel Rewards World Mastercard credit card, which pays 1.5 points for every $1 spent on all purchases everywhere.

If you have one of these cards, putting these expenses through Plastiq — at least for now — is something of a no brainer, particularly for expenses less than $250. You can also stack payments of $250 to the same recipient and avoid the fees, as long as the person or business you’re sending the money to is OK with receiving multiple partial payments over several days — for instance, mortgage processors are often not willing to accept partial payments.

Another Way to Save

After the Plastiq promotion ends (or if you don’t have a Mastercard-branded card), you may still be able to save money by putting your payments through the online service, especially if cash flow is an issue. Talk to your vendors about early-pay discounts. You may be able to shave a couple percentage points off your costs — and not have to worry whether the money is in your business bank account immediately to pay that bill.

Featured photo by Rafa Elias / Getty Images.

CitiBusiness® / AAdvantage® Platinum Select® World Mastercard®
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  • Designed for businesses
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  • Earn 2 AAdvantage® miles per $1 spent on eligible American Airlines purchases
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