The Pros and Cons of Paying Bills with Plastiq

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Many frugal travelers already understand the benefits of paying bills with credit cards. Many of our monthly obligations, from cell phone bills to utilities, can turn into points earning opportunities quickly. However, for those items that do not traditionally take credit cards, such as rent or mortgage payments, is there an option to pay those and still earn points and miles towards our next frugal trip.

In fact, there is a way to do just that. As previously discussed on this forum, Plastiq is an online service that allows frugal travelers to pay all of their bills with a credit or debit card. Backed by secure-socket layer technology, travelers put in the information for the bill they want to pay with their preferred credit card and bills get paid quickly and easily. The result is a payment issued to the obligator, with a small processing fee of 2.5 percent paid to Plastiq.

Does it necessarily make sense to pay bills with Plastiq for the points and miles? Depending on what you are or not paying, it may not necessarily be a perfect match for all your bills.

To begin, consider the base fee structure for Plastiq payments. While processing a credit card comes with a fee, Plastiq takes an extra fee out of their process. At 2.5 percent per transaction, the fee is relatively small compared to other payment portals. For a $1,000 mortgage, Plastiq would charge a $25 fee for payment across all three major card processors: American Express, Visa and MasterCard.

 

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In addition, there is no limit to the bills you can pay through Plastiq. According to their website, anyone who accepts a check or ACH deposit will accept Plastiq. This opens the door for paying many different bills with a points-earning credit card, especially with flexible points cards, including the Chase Sapphire Preferred.

For the obvious upside, there are some situations where it may not make sense to pay with Plastiq. For example, the payment service does not accept cards on the Discover network, meaning those trying to take advantage of the double miles paid out by the Discover It card would not be able to maximize with Plastiq. Moreover, multiple payments using Plastiq could take a toll on payment fees alone. At $25 per $1,000 in payments, travelers who use Plastiq to pay multiple bills could inadvertently be adding to their bills without even knowing it.

In addition to the fees, there are some limitations to what Plastiq considers a credit or debit card. While debit cards are charged at a lower rate, not all debit cards count. Prepaid debit cards and cash gift cards are not considered debit cards – meaning those who buy gift cards for a bonus for use later may not get to reap a lower fee through Plastiq.

Finally, those who pay bills in the True North may find themselves paying even more through Plastiq. Non-Canadian cards used to pay Canadian bills may be subject to additional fees. Even with a no international fee credit card, it may not make sense to use Plastiq to cross international borders.

For those who are responsible and want to earn extra points for paying their bills, Plastiq can be a good option for many – but not all – items. By knowing the limits of this program, every traveler can make decisions on what to pay and what to skip with Plastiq.

 

Which bills do you pay off with Plastiq? Let me know how you manage this tool in the comments below!

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