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As many of you know, I started doing free credit card consultations last month, and the response has been amazing. Though one thing that’s come up during several sessions is anxiety over applying for certain cards because of the minimum spend requirements. I completely understand this concern. I’m also not a big spender in my daily life. So in this video/post, I want to review a service called Plastiq that can help you with meeting your minimum spend. I’ll discuss how to use Plastiq and share some general tips to keep in mind when using the service.
What is Plastiq?
Plastiq is essentially an online bill pay service that is similar to your bank. The difference is that the payment is processed on your credit card as a purchase and not a cash advance. Plastiq then makes either an electronic payment or sends a check in the mail to pay your bill. It’s a simple and hassle-free way to shift some spending onto your credit card.
Plastiq has been around since 2009. This is important to know since a lot of similar services have come and gone over the years. However, Plastiq has remained in business and been a reliable service. I’ve been using them since I started the points and miles hobby in 2011, and their service has always been a great way to use your credit card to pay for expenses in your life that normally aren’t credit card friendly. This includes things like rent payments, utilities, car payments, business vendors … basically anything!
What’s the catch?
Plastiq charges a 2.5% transaction fee for credit card payments. You might ask, “why would anyone want to pay 2.5% to make a purchase?” It’s a valid question! I’ve personally relied on Plastiq when I needed to complete the minimum spend on a new credit card. Since I’m not a big spender, I try to align my credit card applications with big purchases in my life. Though sometimes, the timing just doesn’t work out. In those situations, Plastiq has helped me to meet the minimum spend.
The reason it might be worth paying the fee is that the benefits you’ll get from a welcome offer usually offsets the fee for
Understanding the value of points
If we assume that each Chase Ultimate Rewards point is worth 1.25 cents, which is likely the minimum redemption value for travel, then 50,000 Ultimate Rewards points are equal to $625. If you were to value the points at two cents per point (e.g., The Points Guy), then 50,000 points are worth $1000. In the big picture, the fee might be worth the cost if you know you can earn a large and valuable welcome offer in the process.
I know some people who even pay their rent or mortgage every month with Plastiq since they feel that they come out on top. For example, a friend of mine uses his American Express Blue Business Plus credit card to pay his work studio rent every month using Plastiq. He’s able to squeeze more than two cents a point on redemptions, primarily on flights to Asia via ANA. Since the card earns two Membership Rewards points per dollar, he calculates the earning rate of this card to be about 4%. With that in mind, he’s willing to pay the fee since he is earning value from the transaction.
How to use Plastiq
To use Plastiq, all you have to do is head over to their website to sign-up for an account. It’s completely free. You’ll be asked to confirm your email. Once you confirm, you’ll enter your personal data. There’s also a section at the bottom to enter a referral code. If you need one (or want to support our website/channel), you can use TripAstute to get $500 fee-free dollars after you spend $500 on the service.
Once your account is set-up, you’ll want to add credit cards to your account.
Once your cards are set-up, you’ll click Start a Payment. You can then Add a New Recipient, or if you’ve already done so, you can start scheduling your payment. Just like any bill pay program, you’ll be asked to see if the vendor is already in their database, which allows them to make an electronic payment. You’ll be asked whether you want to make a single or repeating payment and the exact date of payment delivery.
You’ll also have the opportunity to apply any fee-free dollars that you may have earned. Just click on the Apply my Fee Free Dollars option at the Review screen before you submit your payment. This will apply the credit toward your payment.
Plastiq also offers expedited options, both for electronic and check payments. For check payments, it’s 3% instead of the 2.5% transaction fee, plus additional fees for FedEx overnight and handling. I wouldn’t use it unless you really need it, but the option is available. Plastiq also offers domestic and international wire options, but those cost extra too.
Restrictions of Plastiq
There are a few restrictions when using Plastiq that you should keep in mind. UPDATE:
American Express cards:
If you’re using an American Express card, there are some categories of payments that are not allowed on Plastiq. This includes:
- Student Loans
- Auto payments
- Business invoices
- Business utilities
- Health insurance premiums
This could change in the future, so you’ll want to check Plastiq’s Support Section on the current restrictions. Plastiq will also warn you on the final screen before submitting your payment if there’s an issue.
You can’t use a Visa or American Express to make a mortgage payment. This affects mortgages but not rent payments. I can understand why this might be the case. However, I know it might be frustrating for those of you with a mortgage payment, especially if it’s your biggest monthly expense.
If you’re using a Chase card, make sure you check your credit limit and the amount that you’ve used. Chase has a policy where you can’t make a
I experienced this issue a few months ago and didn’t realize it until I noticed that I didn’t receive a notification for the payment. When I checked online, I found that the payment had failed. I then had to ask Plastiq for more information on the transaction, so be careful with this rule!
Tips for using Plastiq
As always, I want to share some general tips for using the service.
1. Set a reminder to verify that your payments have processed:
As I mentioned earlier, I had a payment fail, but only knew it since my card wasn’t charged. I don’t think that Plastiq sent me a notification or email either. To avoid this situation, I recommend setting up a reminder to verify that your payment goes through. I have notifications for all credit card charges through my mobile apps. However, I also set a reminder in my to-do list to verify that the payments have processed.
2. Don’t use Plastiq for peer-to-peer payments:
Plastiq cannot be used to pay your roommate or friend for dinner. It’s meant to work for official payments where there’s an actual contract in place. Just be aware that you’ll only want to use the service for official arrangements where the transaction can be verified.
3. Consider requesting a decrease in your cash advance limit:
4. Check your card’s expiration date:
You’ll want to make sure that your credit card has not expired when using Plastiq. This is easy to miss, especially if you set-up a recurring payment. Again, I recommend setting up a reminder for yourself to update your account when the card is close to expiration.
5. Set-up a PIN code and two-step authentication:
Plastiq offers additional security measures with their service. I highly recommend setting up a PIN code and enabling two-step authentication. Just like with any bank account, you want to keep the account as secure as possible.
6. Use their referral system to earn fee-free dollars:
If you start using Plastiq, I recommend taking advantage of their referral system. You can earn $1000 of fee-free dollars (FFDs) when someone uses your referral code. They’ll also get $500 FFDs after they make their first payment of at least $500.
7. Be mindful of Plastiq reward dollars expirations:
If you earn fee-free dollars, then you have only 90 days to use them. That’s not much time, so make sure you plan accordingly if you earn FFDs.
8. Consider using Plastiq for business expenses:
While we normally think of Plastiq in terms of meeting our minimum spend requirements, it’s also a useful tool for businesses. If you’re a small business, you can use Plastiq to manage your cash flow for expenses. You can even work with vendors to see if they’ll accept payments earlier for a discount. For example, on my other small business, I’ve sometimes been given the option of paying a supplier earlier for a 5-10% discount. Since
Another advantage for small businesses is that you can classify Plastiq transaction fees as a business tax deduction. It’s something to consider if you operate a small business and looking for additional tools to manage your cash flow and payments.
9. Check for promotions on Plastiq’s website:
It’s not uncommon for Plastiq to run promotions where they drop the transaction fee to 1.5%. I recommend signing up for their newsletter or checking their website often for any promotions.
Overall, I think
Have you used Plastiq? Do you have any other tips for using the service? Let us know in the comment section below.
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