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Plastiq: What it is and if it’s right for you
Pay your utility bills, mortgage, taxes and more with a credit card.
Earn credit card rewards as you pay large expenses with this payment service. Though, expect a fee.
What's in this guide?
- What is Plastiq?
- How does Plastiq work?
- How much does Plastiq cost to use?
- Why should I use Plastiq?
- Credit cards with high signup bonuses
- Which credit cards does Plastiq accept?
- What can Plastiq pay for?
- Plastiq payment options
- How to set up your Plastiq account
- How to make the most of Plastiq
- Bottom line
- Frequently asked questions
What is Plastiq?
Plastiq is a payment service that lets you make credit card payments where credit cards aren’t normally accepted. This can help you earn credit card rewards faster. Payments can include rent, mortgage, tuition, taxes, or if you’re a business owner paying employees and contractors.
While there is a fee to use Plastiq, this service is helpful when you need to meet the spending requirement to earn a big welcome bonus on a new credit card.
How does Plastiq work?
The concept is simple: Add your credit card to your Plastiq account, then provide recipient information and payment amount. Plastiq charges your credit card as a purchase — not cash advance — and you choose if the recipient gets paid through an ACH, check or a wire transfer. The recipient doesn’t need a Plastiq account to receive the funds.
Is Plastiq similar to PayPal?
Yes, except Plastiq gives you more payment options, including paying your school tuition, mortgage, taxes, utilities and more.
How much does Plastiq cost to use?
Every purchase you make using Plastiq comes with a standard 2.5% fee for a credit card. Debit cards issued in the US come with a 1% fee of the payment amount. Additional fees could be incurred, depending on the method of delivery. For example:
- US Domestic wire of up to $20,000 costs $20 bank fee plus $10 handling fee.
- Expedited US check comes with 0.5% base fee plus $40 FedEx priority overnight fee plus $10 handling fee (for checks over $3,000 the handling fee is waived).
- Expedited ACH transfer 0.5% expedited base fee plus $5 bank fee plus $10 handling fee (handling fee is waived for transfers over $3,000).
Only standard ACH bank transfers don’t have additional fees.
Why should I use Plastiq?
Benefits to using Plastiq include:
Earn a credit card signup-bonus.
You could use Plastiq if your credit card has a high spending requirement to earn a signup bonus.
Qualify for a big-spend bonus.
Some credit cards have high annual spending criteria to earn a certain bonus or a benefit. Examples include hotel or airline credit cards where you need to spend more than $30,000 annually to earn an elite tier status or to earn a companion certificate.
Earn more points than paying fees.
Most credit cards don’t have high rewards rate on all purchases to offset Plastiq’s fees. However, Plastiq is known for giving promotional periods that waive the fee, or giving referral bonuses that clears the payment fee.
Make payments when you don’t want to use cash.
This can be helpful to free up cash if contractors will only accept cash or checks.
Can you make cross-border payments?
Yes but cross-border payments have higher fees, exchange rate fluctuations and they can take longer to process. You can only send payments from the US to Canada.
Can I pay in a different currency than the US dollar?
Yes. Plastiq currently supports payments in Chinese yuan.
Credit cards with high signup bonuses
Plastiq allows you to pay using your credit card for services that might not typically accept credit cards. This means Plastiq could help you meet your signup bonus requirement by giving you more spending options to make purchases. Compare credit cards with high signup bonuses to find the best fit for your spending habits.
Which credit cards does Plastiq accept?
Plastic accepts all major credit cards in the US. However, keep in mind that some have limitations and you won’t be able to pay for everything with every card.
- American Express
- Diners Club International
What can Plastiq pay for?
Using Plastiq, you can pay for:
- Auto lease
- Auto purchases
- Business services
- Club fees
- Legal services
What Plastiq can’t pay for
Plastiq has some payment limitations:
You can’t use Visa on Plastiq to pay a mortgage.
Amex cards can only use Plastiq for government, utilities, education, residential rent, and club fees and membership purchases. All other purchases common with Plastiq aren’t supported by Amex.
Plastiq payment options
You decide how the recipients are paid. Choose between wire transfer, check or an ACH transfer. Depending on which method you choose, and whether it’s a standard or expedited payment, you could pay additional fees.
Is it worth it to use Plastiq?
Using Plastiq only makes sense if the rewards outweigh the fees. This includes earning a signup bonus, reaching a high spending goal annually or using a promotional period with waived fees.
For example, the reward may outweigh the fee if you use a credit card like the Iberia Visa Signature® card. The card lets you earn 4x points for the first 12 months of card membership or until you reach $30,000. Considering the average value of Avios points is 1 cent each, your rewards rate will offset Plastiq’s fee.
Also, the $30,000 is the required annual spending to earn a companion certificate. If you pay your mortgage, rent, your insurance, auto lease, auto purchase, tuiton or taxes with Plastiq, you can easily earn the companion certificate.
How to set up your Plastiq account
- Visit the Plastiq website and submit your email.
- Follow the link you receive in your email.
- Add your full name and phone number.
- Add your credit card.
- Add payment recipient.
How to make the most of Plastiq
Since using Plastiq comes with fees, there are some workarounds you could use to maximize rewards.
Plastiq referral program.
Every time someone signs up with your referral link and makes total payments of $500, you’ll receive 1,000 Fee-Free Dollars (FFD) and they’ll receive 500 FFD.
Use standard ACH transfer for payments.
This delivery method has a standard 2.5% Plastiq fee for payments and nothing more. It’s almost as fast as the expedited methods but it costs less.
Paying credit card balances off immediately.
If you don’t, you’ll incur penalty fees and an APR. This will defeat the purpose of earning rewards through Plastiq.
Plastiq can help you reach a certain spending goal with your credit card. But, beware of the fees. Using Plastiq only makes sense if you’re working towards a signup bonus or additional credit card rewards or if your card’s rewards outweigh the fees.
However, if you don’t find Plastiq appealing to your financial situation, find out other ways to meet your credit card spending requirements.
Frequently asked questions
Pictures: Getty Images
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