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 Link (contains my referral)
Plastiq is a bill payment service which allows us to pay any bill with a credit or debit card for a 2.85% 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 and Cards
Plastiq allows Visa, Mastercard, Amex, and Discover. All payments in the following categories can be paid on ANY card and don’t have ANY cash advance issues:
- Residential Rent & HOA Fees
- Commercial Rent
- Taxes & Government Fees
- Utilities (Electricity, Cable, Internet, Telecom)
- Tuition (including daycare and camp)
For all other categories, here’s a list of cards that currently work for paying bills on Plastiq without any cash advance issue (as of 5/29/19):
- All Mastercard and Discover ordinary credit and debit cards work fine with no cash advance fees and earn rewards.
- All American Express cards work fine with no cash advance fees and earns rewards.
- Visa business cards work fine with no cash advance fees and earn rewards.
- Visa personal cards from Capital One and Wells Fargo work fine with no cash advance fees and earn rewards.
- Visa personal cards from Chase work fine with no cash advance fees and earns rewards as well, but it initially posts as a cash advance and you are thus limited to your cash advance limit on the charge (typically 20% of you credit line).
- Plastiq will tell you if there’s ever a cash advance issue, if they don’t flag you, you know you’re in the clear.
- Readers report in the comments that Alliant cards no longer earn rewards on any Plastiq transactions. (There isn’t any cash advance issue, though.) We’ve also seen mixed reports on Navy Federal cards.
- Plastiq stopped allowing payment from prepaid cards, such as Visa and Mastercard gift cards. There are still select prepaid cards that work, such as payroll cards and business prepaid cards. More details can be found here.
- See a comprehensive list of all cards here.
Aside from the issue of which cards earn rewards and don’t have cash advance fees, there’s a separate issue of which bills you can pay; some card issuers have rules about which bills can be paid using their card. The Plastiq system will automatically block you completely from using a card for a payment that the issuer does not allow.
- Mastercard and Discover can be used for all payees, including mortgage payments.
- 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.
- Visa can be used for virtually all payees, with the sole exception of mortgages; everything else should work.
Plastiq charges a flat 2.85% 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 2.85% fee.
Most cards get us somewhere in the 1-3% return from their standard rewards, and this can largely offset the 2.85% 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 2.85% 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!
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.
As of now (3/8/19), I’m not aware of any card that earns bonus points with Plastiq, it’s just the regular rewards rate. Most recently, it was working with Chase INK Preferred, but that ended. AT&T used to work for 3x on some payments, but as of March 2018 something seems to have changed and it’s no longer working.
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.
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 bonus will hit their account and they’ll be able to make another $50 payment fee-free. At that time, as well, the $1,000 bonus will hit the referrer’s account.
Update 10/26/20: While the public offer is just for $50 in free processing, you can use my referral link for a special offer to get $1,500 in free processing. Note: the spend requirement on this offer is $5,000, steeper than the standard offer. You must first spend $5,000 in payment processing and then the $1,500 in free processing will be applied automatically to your account.
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 2.85% fee is reasonable
The exception would be paying taxes which can be done for less than 2.85%. 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.