One of the best ways to earn Reward Points is to credit card. The problem for many of us is that there is only a limited number of things we can pay by credit card. This is where Plastiq comes in.
This is a service that I have used for years and have reviewed in the past as well. However, I think my use of this service is over. I’ll share more details below, but to summarize the changes:
- Plastiq increases its costs as of today, from 2.5% to 2.85%
- Plastiq increases transfer fees
- In recent months, Plastiq has made its referral program much worse
- Over the past week, I interacted with Plastiq customer service for the first time, and it was disappointing, to put it mildly.
- Plastiq used to offer all kinds of promotions, but these are now extremely rare
Let’s go into a little more detail about this …
Plastiq Bill Pay Basics
Plastiq is a bill payment service that allows you to pay virtually all expenses by credit card. There are two common reasons people might want to use this:
- Because they appreciate the rewards offered by credit cards
- For cash flow reasons (maybe someone has 0% introductory APR offer on a credit card, and sees it as a good opportunity to pay a bill)
I’m focusing entirely on this in terms of the rewards, because in general I recommend doing whatever you can to avoid credit card funding, given the amount of fees. At the same time, I understand that some people like a 0% introductory APR offer on a credit card, so no judgmental.
What credit cards can you use with Plastiq?
Plastiq allows you to pay with most major credit cards, including those issued by American Express, Mastercard, Visa, Discover, Diners Club, JCB, and Capital One (although Capital One is limited to business cards).
There are restrictions with some issuers regarding the type of payment that can be made, and you can find out more here.
How much does Plastiq charge?
Plastiq has increased its fees effective July 1, 2020 – Plastiq previously charged 2.5% for payments made by credit card, but now charges 2.85%. Plastiq justifies the increase in fees by explaining that several major credit card companies have announced upcoming interchange price increases, which has a direct impact on their costs.
Not only does Plastiq increase the fees for every dollar processed, it also increases the fees for those who need to send transfers:
- The domestic transfer fee is $ 40 (it was previously $ 30)
- International transfer fees are $ 60 (they were previously $ 50)
It is disappointing to see Plastiq not only increasing fees per dollar processed, but also increasing transfer fees.
I’ll go into more detail on this below, but I would say ~ 2.5% was right on the cusp of what I considered useful, as I find it hard to get excited about ~ 2.85%.
Does Plastiq have a referral program?
Plastiq once had a great referral program, with a reward currency of “Fee Free Dollars” (FFD). Each FFD is good for a dollar bill payment without any kind of charge.
Unfortunately, this has been significantly reduced:
- Until a few months ago, this offered 1000 FFD to the referent and the referred person.
- From now on, the referral program offers 100 FFD to the referral person, and nothing to the referred person
It’s not really particularly convincing …
What payments can you make with Plastiq?
Plastiq lets you pay for all kinds of things including (but not limited to) auto rentals, auto purchases, business services, club fees, mortgages, contractors, employees, insurance, legal services, rent, tuition, taxes, utilities and more.
How does the payment process work with Plastiq?
The payment process with Plastiq is fairly straightforward.
The first step is that you need to add the recipient to your Plastiq account, which includes adding their name, address, preferred payment type (check, wire transfer or ACH) and some basic details about the type of payment you are. perform.
Next, you need to enter your payment amount, which includes entering all of your credit card details (if they are not already saved in your account).
You can save your credit card details as well as information about the people you pay to your account, and you can even set up a recurring payment.
Note that when adding a new recipient, sometimes you will need to verify additional information or provide invoices.
How does Plastiq pay your recipient?
Once you have gone through the payment submission process, Plastiq will make the payment on your behalf, with the following options:
- You can pay by check, and the check will be delivered within eight business days
- You can pay by bank transfer, and domestic transfers take place the same day or the next day, while international transfers take 1-3 days
- You can pay by ACH bank transfer and the funds can be deposited into the recipient’s bank account the very next day
How is Plastiq’s customer service?
This was a major source of disappointment. Until recently, I never had to contact Plastiq customer service. Well, unfortunately, last week I learned that this is virtually nonexistent, which seems like a big deal for a business that promises fast bill payment service.
I had difficulty logging into my account last week and Plastiq did not respond by email. Plastiq also does not have a number you can call.
They have a chat function, but that didn’t prove particularly useful either …
Is using Plastiq worth it for the rewards?
While Plastiq opens up all kinds of opportunities for making credit card payments, the cost is now 2.85%. The question becomes: is it worth it to generate credit card spending at a cost of 2.85%?
At a 2.5% fee, I personally thought it was worth it, as I find it harder to get excited about the 2.85% fee, at least under most circumstances. .
Let me tell in advance what I’m doing pay my personal taxes by credit card. I can do this at a cost of 1.87% through a different service (Pay1040.com), and it’s a price that’s well worth it for me.
Historically, I would pay taxes with the Chase Freedom Unlimited® (see again), because he earns 1.5x points per dollar spent, and in conjunction with the Chase Sapphire Reserve® Card (see again), you can get the maximum value of these Ultimate Rewards Points.
Personally, I think it’s definitely worth earning Ultimate Rewards points for ~ 1.25 cents each, as I value them a lot more (~ 1.7 cents each).
Under what circumstances is it worth making payments with Plastiq?
If you need to make minimum spending on a credit card
It might be worth using Plastiq if you’re struggling to meet the minimum spend on a credit card, but being able to pay the expenses by card would help.
For example, let’s say you get the Ink Business Preferred® Credit Card (see again), which offers 100,000 Ultimate Rewards points after spending $ 15,000 in three months. If being able to pay the bills by credit card would help you achieve this, it might be worth it.
Paying $ 428 for the chance to unlock a huge welcome bonus, along with the points you earn for that $ 15,000 in spending, could very well be worth it.
If you unlock a threshold bonus
It might help to generate additional credit card spending with a 2.85% fee. In addition to the general return on spending offered by the cards, some cards also have threshold bonuses, where you get an additional bonus if you spend a certain amount.
To give an example, the World of Hyatt Credit Card (see again) offers a Category 1-4 Free Night Certificate when you spend $ 15,000 on the card per cardholder year, plus two additional Elite Nights for every $ 5,000 spent.
Suppose you expected to end the cardholder’s year after spending $ 10,000 on the card and you don’t have any easy way to increase it. It could absolutely be worth using Plastiq for that $ 5,000 of spending (for a fee of no more than $ 143) so you can get a Category 1-4 Free Night Certificate, 5,000 extra points, and two extra Elite Nights. .
If you place a lot of importance on rewards / if you have very good cards
I would say that there are some cards that it might be slightly worth spending for a 2.85% fee:
These two cards allow you to generate transferable points for 1.43 cents each. While not a slam dunk, it is below my valuation of 1.7 cents per point.
If Plastiq has another promotion
At the time, Plastiq was constantly offering promotions for lower transaction fees. I would get amazing offers all the time, but it looks like they’ve drastically reduced the number of offers in recent months.
That takes away a lot of the appeal of Plastiq, unfortunately.
Summary of Plastiq
I was very excited about Plastiq, when they had a 2.5% fee and constantly had promotions that lowered my average transaction cost even further.
They have now increased the fees to 2.85% and promotions seem rare. When you combine that with their (very) lackluster customer service and lack of promotions, I find it hard to recommend Plastiq under most circumstances.
I think Plastiq might still be worth it if you’re trying to meet the minimum spending requirement on a credit card or looking for a particular threshold bonus. However, in general, I just find it hard to get excited about the 2.85% transaction fee.
With a 2.5% fee, I thought Plastiq might make a lot of sense with cards like the Citi® Double Cash Card, although for me it is much less worth it with the rising fees.
What do you think of Plastiq’s value proposition, especially in light of recent changes?