Posted by Chuck on March 14, 2018
Manufactured Spending

Published on March 14th, 2018 | by Chuck

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Plastiq Review: Use a Credit Card to Pay your Mortgage, Rent, or Any Other Bill

When we first wrote about Plastiq a couple years ago, it was a brand new service and nothing was known about how they operate. A lot has been clarified and a lot has changed, and I thought it’s worth writing a full review on the service. We’ll keep this page updated with any future changes as well. Please let us know if there’s anything we should add or if you see anything that needs updating.

Plastiq Review

Plastiq Link

Plastiq is a bill payment service which allows us to pay any bill with a credit or debit card for a 2.5% processing fee.

It’s long been possible to pay select bills with a credit card for a fee using various services; for example, here’s a Complete List Of Options For Paying Your Rent With A Debit Or Credit Card. The novelty of Plastiq is that it’s possible to pay any bill with a credit card; rent, mortgage, taxes, tuition, loans (car, student, home equity, etc.), utilities, or anything else.

Even small businesses can be paid via Plastiq. Think: your contractor, caterer, gardener, accountant, lawyer, or therapist. Plastiq will mail out a check to the selected address. Note that Plastiq may, in some cases, require verification with an invoice from the payee.

  • You can not pay a friend with Plastiq, but you can pay any business who provides goods or services.
  • You can not pay a credit card bill, but you can pay other kinds of loans.
  • You can not pay any kind of retirement or savings plan accounts.
  • You can not send a payment outside the USA/Canada.

 

Things to Know

  • For the curious: here’s what the check will look like.
  • Plastiq does not send out any sort of 1099’s or any other tax form. Some recipients might get nervous, but it’s really just a standard check, no different than had you sent the check yourself.
  • You can schedule out payments into the future. For example, you can set up a monthly recurring payment of your rent, mortgage, or loan payment.
  • When sending a payment, there’ll be a space to put your account number or any other applicable information in the Memo field.
  • Some recipients will be sent a physical check while others are paid via ACH. Any recipient you add yourself (i.e. it wasn’t previously in the system, like your caterer or a bank they didn’t have in the system) will be sent via mailed check. Recipients already showing in the system are sometimes paid via ACH and sometimes via check. Federal tax payments are paid via check.
  • Check payments take around 2 weeks to get to the recipient while ACH payments take around one week.
  • Check payments have a 30-day expiration date. That seems unreasonably short to me, but our Plastiq contact does assures me that checks can go through beyond the 30-day timeframe; the timeframe is there only to encourage recipients to deposit it right away.

Eligible Payments

Plastiq allows Visa, Mastercard, Amex, and Discover. You can even use Amex, Visa, or Mastercard gift cards to pay; just use your address as the billing address, and they won’t put any $1 hold on the card when processing the payment.

  • Mastercard and Discover can be used for all payees, including mortgage payments.
  • Visa can be used for virtually all payees, with the sole exception of mortgages; everything else should work.
  • Amex can be used on for the following payees: “Government, Utilities, Education, Residential Rent and Club Fees and Memberships.” So you can’t use an Amex for mortgage payments, car or loan payments, vendor payments for your business, your gardener, contractor, or commercial real estate rent. Easiest way to know if it works is to simply input your payee in the system and see if it limits you from using Amex.

There’s a newer development causing some Visa personal cards not to be allowed on Plastiq. The following Visa cards cards still work as before: Visa business cards, Visa gift cards, Visa cards issued by Capital One, and Visa cards issued by Chase are find as well (though Chase cards have a limitation whereby you can only charge up to 20% of your credit line).

Mastercard, Amex, and Discover all work as before.

Fees

Plastiq charges a flat 2.5% processing fee for credit card payments (e.g. a $1,000 payment will cost $1,025 including the fee). Plastiq often runs promotions offering lower fees with certain conditions. Check this link to see if there are any current offers.

Debit cards cost just 1%, but prepaid/gift cards do not count as debit cards – they pay the full 2.5% fee.

Most cards get us somewhere in the 1-3% return from their standard rewards, and this can largely offset the 2.5% fee. There isn’t necessarily any gain there, but where Plastiq really shines is for meeting spend requirements; those large bonuses make it easily worth the 2.5% fee. For example, if you have a minimum spend offer to get 50,000 bonus miles after spending $2,000, it’ll cost you $50 in fees to send $2,000 through Plastiq. Buying 50,000 miles for $50 is usually a bargain!

Category Bonus

Updated 3/13/18

Other than meeting spend requirements or draining down your prepaid gift cards, there’s another angle to consider which is the potential category bonus. Category codings change constantly, and there have been various angles over the years in this regard.

Last we’ve heard, Plastiq has recently been earning 3x with CIP on all payments. This has gone back and forth, and can easily change at any time, but has been consistently working of late. AT&T used to work for 3x on some payments, but as of March 2018 something seems to have changed and it’s not working any longer.

Cash Advance

There isn’t usually a cash advance problem with Plastiq; most transactions will show as ordinary purchases, and they’ll earn points and count toward spend requirements.

Since June 2018, an issue cropped up whereby some VISA cards are treated as a cash advance, at least initially. ALL MASTERCARDS, AMEX CARDS, AND DISCOVER CARDS ARE FINE.

Many Visa cards are fine as well including: all Visa business cards from any issuer, all Capital One Visa cards, Alliant Visa cards, Wells Fargo Visa cards, all debit cards, and all corporate or prepaid cards. Chase cards go through fine and earn rewards, however, they initially track as a cash advance until it reverts to a normal purchase. Thus, you can only send payments with Chase Visa cards in the amount of your cash advance limit (typically 20% of your credit limit), if you try doing more than that the system will block you. Again, it’s totally fine to use a Chase card and you will earn rewards on the purchase, but you are just limited in the amount you can send by your cash advance limit.

Please check out this thorough list from Plastiq to learn about whether this cash advance issue will affect any given Visa card – it goes through each card, one by one, and explains whether it is or isn’t affected.

Referral Program

Plastiq has a referral program which offers ‘Fee Free Dollars’, meaning they’ll process some of your payments free if you refer a friend. The new member also gets a bonus.

  • Referring member gets $1,000 in free processing
  • New member gets $500 in free processing

You’re saving the 2.5% fee, so essentially the referrer is getting a $25 bonus and the new member is getting a $12.50 bonus.

Important: To be eligible for the bonus, the new member must first make $500 in payments. This means that the first $500 in payments will not be free. After paying for their first payment, the $500 bonus will hit their account and they’ll be able to make another $500 payment fee-free. At that time, as well, the $1,000 bonus will hit the referrer’s account.

Here is my Plastiq referral link. Please don’t leave your referrals here, rather, head over to our dedicated Plastiq Referral Thread and leave it there.

Final Thoughts

Plastiq seems to be the best option available currently for using credit card, since:

  • the broad ability to pay so many kinds of bills
  • the 2.5% fee is reasonable

The exception would be paying taxes which can be done for less than 2.5%. For most other bills, this is the easiest and cheapest way of paying with a card. For a lot of people, using Plastiq won’t be worthwhile for ordinary spend, but this can certainly be a great way of meeting spend thresholds or racking up specific miles needed.

Be sure to pay any bill well in advance of the due date, and check that the payment cleared in time. Things could always happen; for example, a payment might get held up for verification. I’ve had good experiences with Plastiq, but it’s never worth relying on completely on a service, always verify and have a backup plan.



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David
David

How do you ensure monthly mortgage payment instead of principal payment? That’s what happened with my first payment of Wells Fargo mortgage

Max
Max

I suggest adding a memo to say “apply towards monthly payment”.

Dave
Dave

I called Chase and found how how to avoid the payment going toward principal. Chase mortgage payments are due on the 1st of the month and any payment received after the 15th is considered late. The rep told me that the payment would need to be received after the 1st of the month as at that time you are in the monthly payment window. If you pay a partial payment during this window it will reduce your regular payment balance as well. It will go toward principal only after your regular statement is paid in full.

Atricus
Atricus

call mortgage company and have them notate the account to take all payments as monthly payment and not principal payments. for whatever reason Suntrust mortgage this year started doing that and i had to call them and get it fixed.

deerseason
deerseason

It sounds based on the other comment that some mortgage companies will take these payments as a principal payment my default. Is that correct? Cause I’d actually want to do that first as a trial (and pay my monthly payment as normal for now).

If I just put “Apply towards monthly payment” or “apply towards principal” depending on how I’d do it, that should be sufficient, right?

Guy Bucktastik
Guy Bucktastik

I have the check sent to my address, then I take it to the bank and pay it in person.

This gives me peace of mind; I know for sure that I’m paying on time. It also gives me the opportunity to pay extra principle or just my payment​, or whatever I might want.

Superchurn
Superchurn

does Plastiq allow this? because that would be a boon for folks needing to include specific paper instructions for Navient payments!

how do i set this kind of thing up? just add a new Navient payee with my own address?

Guy Bucktastik
Guy Bucktastik

I don’t know if they “allow” it, they probably don’t. Just use the payees name, my bank name, and user my own address.

When I did this for a safe deposit box rent payment, plastiq asked to upload the bill. For my mortgage, no questions asked.

Jeremy
Jeremy

My bank requires ACH payments automatically for my mortgage payment. Anyway to get scheduled plastiq payments to count?

Josh M
Josh M

i know you know this doc but others may not, they often have promotional rates for certain card types and payment categories, for instance they just recently had a reduced rate for Amex cards and last year a lower rate for housing payments iirc.

eclipsor
eclipsor

as a DP, for my rent I pay my roommate and not the landlord directly. Plastiq denied my payment when they saw the lease and saw I wasnt paying the landlord directly. After asking, they then let me in old check copies of rent checks to my roommate and allowed me to redo my payment.

P
P

Great dp. I have been hesitant to try plastiq because I pay my sister my share of the rent then she pays the landlord.

Mr. CC
Mr. CC

“You’re saving the 2.5% fee, so essentially the referrer is getting a $12.50 bonus and the new member is getting a $7.50 bonus.”
I think you gain double but it depends on what calculator you use.

Greg
Greg

Referrer and new member fees seem off…2.5% of $1000 should be $25, $12.50 for $500

mnymgr
mnymgr

Never used this service before but keep reading about it.
So for my HELOC monthly payment (less than $100), I can use a prepaid Visa/MC bought at a discount at a local grocery store/OfficeDepot/Staples, and that should work ?
2.5% fee, vs. my 5-9% total discount works great for me ! I run out of things to use these prepaid cards on, sometimes have dozens of them sitting in the car…. 🙁

mord1
mord1

I havent seen many issues, I had 1 major issue, where they sent my mortgage company a check and it was deposited but the mortgage company said they never received the money, the issue has not been resolved yet

joE
joE

Fantastic write up!

you might want to add that if you schedule 6 payments, you will get 1 fee waived. For example if you schedule your mortgage for Jan through Jun, you will get Jan fees waived. This brings your net cost to approximately 2.1%

This is not a special and as of this writing it’s available to everyone.

Ryan
Ryan

Can i use plastiq to pay more than one mortgage a month to rack up 3x points on the CSR?
I was thinking about paying my bro mortgage and he can give me the money.

c3v
c3v

Does anyone know if the name on the credit card must be the same as the name provided to Plastiq upon signing up? I’m wondering if I can create a Plastiq account for my roommate (for referral bonus) and then pay from it using my CC…

Harry
Harry

Does not have to match. I have used various household members names/cards interchangeably across 2 plastiq accounts moving one card to another plastiq account (of course after first removing it from the original account) and so on a few time and so far no issues.

c3v
c3v

thanks for the DP!

Superchurn
Superchurn

this is great to know!

Brandon
Brandon

As Harry said, does not have to match. I have an account for myself and my wife, both using her card with her name. Of course, addresses match.

c3v
c3v

so you don’t even remove the card from one account before using it under another one?

Paul
Paul

Ryan, I’d be very careful if I were you counting on anything more than base points using Plastiq these days. I started using Plastiq last summer to pay my Chase mortgage using the Citi AT&T Access More card. Online payments on this card get 3x thank you points. For the first several months, I received 3x points and everything with Plastiq was working smoothly. I was so pleased with their service that I scheduled 6 monthly payments in September in order to get a monthly fee discount. For some inexplicable reason, beginning in December and without me changing a thing on my end, the mortgage payments started coding in the utilities category, meaning I received 1 point per dollar and was losing money against the monthly fee. I contacted Plastiq customer service and was told the problem was fixed. I tested it again in March and the mortgage payment processed correctly so I again received 3x points for payment. Then once again, without me touching a thing in my account, my April mortgage payment coded as governmental services, meaning 1 point per dollar paid. I was again contacted Plastiq and here’s their absurd response: “Hello, Thanks for writing back. The MCC is set by our processor, not by Plastiq directly, and can change and vary based on the payment being made and the card type being used. Our processor also makes adjustments from time to time, which is why you may see a change since the last payment. We are happy to work with our processor to see if we can make a change that you would request, and need more information from you that we can supply to our processor *Specifically, what exact card type are you using? (brand, rewards type, etc, and what is the category you are seeing an issue for your payment?). The more detail you can share with us, the better we can work with our processor to try to make an adjustment.” This canned corporate response is absolutely ridiculous. Plastiq already knows from my account info, the card I’m using, the identity of the ultimate payee (Chase) and that the payment is for a mortgage (it’s how I set the category and my memo on the payment states “mortgage payment.” I’ll press the point further but am not optimistic at all. I’m do the point now that I’ll likely dial my plastiq usage to… Read more »

Ryan
Ryan

Thanks Paul for the advice. Im just going to do it month by month and hopefully the travel code will be good for the rest of the year. Are you back on Plastiq again now that it has been corrected? Also, im thinking about getting the US Bank Altitude card as a backup.

Paul
Paul

It hasn’t been corrected. After they told me in March the problem was fixed, my April payment coded as governmental services. That’s three different categorizations in 3 months…

Ryan
Ryan

That sucks. How that happened is beyond me. Im going into my 2nd month using plastiq on my CSR.
I wonder if there are other utils that would code 3x travel category.

calwatch
calwatch

Somewhat oddly, by being coded in the “travel” MCC I was able to apply my BOA Travel Rewards points on a Plastiq payment but YMMV.

savemesf
savemesf

Some folks on FT have reported the Governmental Services MCC is earning 3x TYP for AT&T. Waiting for my statement to confirm. . .

Paul
Paul

Hmmm…

I’ll check my next statement as well and report back.

Landon

Hi Paul – Landon from Plastiq. Per your statement: “beginning in December and without me changing a thing on my end, the mortgage payments started coding in the utilities category, meaning I received 1 point per dollar and was losing money against the monthly fee”

Can you email me with the email address associated with your Plastiq account? I’d like to look into this matter for you.

landon@plastiq.com

abey
abey

I use Plastiq every Month to pay rent, I do it for a few reasons, mainly to reach minimum spend on different credit cards but there is also an advantage of a free Month of rent since the credit cards due date will be 3 to 7 weeks later, so you can actually use plastiq to buy more time to pay your rent and for getting an actual free month of rent.
By the way i order the check to my own address (under the landlords name) and then i hand the check to my landlord.
It usualy takes me around 5 Business days to get the check but they’re a bit inconsistent, i once had that it never showed up and i had to cancel the check, pay the landlord cash and get a refund, that’s why you should always order 2 weeks ahead.
One more thing to keep in mind, the check expires/voided after 30 days from when you order it, so you can’t order too early or stock up.

sybloc
sybloc

“The novelty of Plastiq is that it’s possible to pay any bill with a credit card; rent, mortgage, taxes, tuition, loans (car, student, home equity, etc.), utilities, or anything else.”

Keep seeing this stated (in various forms) and it is very misleading. Unless things have changed recently, you CANNOT pay credit card bills with Plastiq.

Ryan
Ryan

You can pay any bill with Plastiq except another credit card bill. I don’t think people should use it unless you’re breaking even to meet spending requirement or coming out ahead with a 3x reward card.

William Charles

Credit card payments are specifically mentioned as an exception in the post?

sybloc
sybloc

Every time I see Plastiq advertised the phrasing is always “pay any bill” emphasized (not just this blog). Considering the percentage of bills that are credit-card related, this is disingenuous at best.

Plastiq is the most guilt of this. “Any bill” ” means every bill, or all bills. It should be changed to “most”. It’s false advertising and drives me nuts (to the points of considering submitting complaints).

Landon

HI sybloc – Landon at Plastiq here. With Plastiq, you *can* pay any bill/expense through Plastiq. Peer-to-peer, credit card statements, and the like are not true “bills”, though some often confuse them as such.

If you ever have any questions about which payments are and are not permitted, please see section 4.1 of our Terms: https://www.plastiq.com/terms/#h.ij2m85hppay8

sybloc
sybloc

Blatant false advertising:

sybloc
sybloc

Can you edit all my bad link osts?

We need a preview button…

http://imgur.com/hpfXhZT

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