How to increase credit card spend from your couch, (almost) fee-free

UPDATE 8/21/2015: Amex has changed their terms for portal cash back. They now only allow cash back for gift card denominations of $200 and below.  As long as this restriction is in place, the process outlined in this post will not work to save you money.  We will leave this post in place, though, in the hopes that the restrictions will be lifted sometime in the near future.

Yesterday I announced a new promotion: if you sign up for the Plastiq bill payment service via a promotional link, credit card payment fees will be reduced from the usual 2.5% rate to just 1.99% for MasterCard and American Express credit cards.  Full coverage of the promotion, and Plastiq, can be found in these posts:

increase credit card spend from your couch

Fee free bill payments via credit card

The approach to fee-free bill payments is fairly simple:

  1. Sign up for Plastiq via a promotional link
  2. Buy Amex gift cards and get approximately 2% cash back via cash back portals.
  3. Use Plastiq to pay bills that can’t normally be paid by credit card (mortgage, rent, car payments,…).  Pay with Amex gift cards and incur a 1.99% fee.

Through this approach, you will earn credit card rewards when buying Amex gift cards, and fees will be (mostly or entirely) offset by portal cash back.  Let’s look at each step, in turn…

Sign up for Plastiq’s promo rate

This only needs to be done once.  If you are new to Plastiq, sign up here: (Note: I will receive a $5 referral fee. I had asked Plastiq to pass along savings to readers instead, but they didn’t want to complicate the promotion in that way).  Once you have signed up under a promotional link, you can log in directly to to pay bills and you will still qualify for the promotional rates.

If you signed up for Plastiq before this promotion started, you can re-register with a different email address in order to get the promotional rates.

Buy Amex gift cards and get cash back

American Express gift cards can be found on a number of cash back portals.  The usual maximum cash back rate is 1.5%, but offers for 2% and 2.25% cash back appear frequently as one-day promotions.  The key is to subscribe to Frequent Miler’s Quick Deals so that you’ll be alerted each time cash back rates increase.

Please see these posts for details:

You may also find this post interesting:

Use Amex gift cards to pay bills via Plastiq

To use an Amex gift card, simply log into your Plastiq account and add the gift card as a new credit card.  Then, select the gift card as your payment source when paying a bill.  Since the payment and fee are charged together, make sure that the payment is less than the gift card’s total value.

Plastiq understands that gift cards may be added and removed from the system frequently. It is possible, though, that their risk team will contact you for information about what you’re doing. As long as you answer honestly it shouldn’t be a problem.  For example, it is fine to say that you earned cash back for buying Amex gift cards through a portal.

Unlike some other services, Plastiq does not put a $1 hold on your gift card when you add it to the system, so it is easy to use up the entire value of a gift card at once.

The gift card payment formula

Plastiq always charges the bill payment amount and their fee to the same payment source.  So, you can’t pay a $2000 bill with a $2000 gift card.  Instead, you can figure out how much can be paid by dividing by 1.0199, like this:

$2,000 / 1.0199 = $1960.98

So, you can pay up to $1960.98 with a single $2,000 Amex gift card.  With the 1.99% fee, the total charged to the gift card will be exactly $2,000.

Paying more than $1960.98

If you have a bill that exceeds the amount that can be paid from a single gift card, you’ll have to make two (or more) separate payments to that payee.  Most billers will accept multiple separate payments without issue.

The Math

How can I say that this method is fee free when there are fees associated both with buying Amex gift cards and making payments through Plastiq?  Let’s walk through an example:

Each Amex gift card has a $3.95 fee.  As a result, you’re best off buying the largest denomination possible.  In this way, the fee is minimized as a percent of the total.  While Amex allows people to buy cards with $3000 denominations, you can’t earn cash back from portals for any denominations higher than $2,000.  So, the ideal denomination to buy is $2,000 per card (but it’s fine to buy multiple cards in one order)

Amex also charges for shipping: $8.95 for expedited 2 day shipping, regardless of the number of cards you buy at once.  You can minimize this shipping fee as a percent of total by buying multiple $2,000 cards at once.  They also offer an unlimited shipping plan for $99 per year.  If you enroll in that plan (or the 3 month free trial of the plan), then shipping is free with each order.

Let’s assume that you are not enrolled in the shipping plan and that you place an order for three $2,000 gift cards.  And, let’s assume that you clicked through from a portal that offered 2.25% cash back at the time:

  • Credit card charge: $6,000 + $11.85 (card fees) + $8.95 (shipping) = $6020.80.  You will earn credit card rewards based on this total amount.
  • Portal rebate: 2.25% of $6,000 = $135

Now, let’s assume you make three bill payments of $1960.98 each and you pay with the Amex gift cards.  After 1.99% in fees, your Amex gift cards will be completely depleted.

  • Final out of pocket cost after portal rebate: $6020.80 – $135 = $5885.80
  • Amount paid to payees: $1960.98 x 3 = $5882.94
  • Net bill payment fee: $5885.80 – $5882.94 = $2.86
  • This process results in a tiny net fee (not including credit card rewards) of $2.86.  As a percent of total paid to billers, this net fee is incredibly close to zero: .05% (that is, one twentieth of 1%)

Breaking even with a 2.25% portal rebate:

  • Without the free shipping plan, the break even point hits when you buy 5 $2,000 cards at once and earn 2.25% cash back.
  • With the free shipping plan, you’ll break even with just one $2,000 card.  In fact, you’ll make a $2 profit per card.

Net fee with a 2% portal rebate:

  • With free shipping, the final net fee will amount to .15% (about 1/7th of 1 percent)
  • With $8.95 shipping, the net fees for buying $2,000 cards are:
    • 1 $2k card: .6%
    • 2 $2k cards: .4%
    • 3 $2k cards: .3%
    • 4 $2k cards: .27%

Why not Bluebird, REDbird, or Serve?

There are ways to use Bluebird, REDbird, or Serve to increase credit card spend at a lower cost than Plastiq.  It is usually possible, for example, to buy Visa gift cards with a fee of around 1%, and those gift cards can then be liquidated for free with any of the “bird” cards (see: Beginner’s guide to buying & liquidating Visa & Mastercard gift cards).  And, if you start with Amex gift cards at 2% to 2.25% cash back, then use those to buy Visa gift cards, then liquidate with a “bird” card, you can earn a profit on top of earning rewards from credit card spend.  Isn’t that better than Plastiq?…

Many people don’t use Bluebird, REDbird, or Serve

There are many reasons why people may not use Bluebird, REDbird, or Serve to increase credit card spend, such as:

  1. It is (or seems to be) too complicated
  2. An individual may not know of a good source for buying Visa/MC gift cards with a credit card, let alone an Amex gift card
  3. The idea of making several visits to Walmart/Target/etc. each month may be unappealing.
  4. The local Walmart/Target/whatever may have policies against accepting gift cards as debit cards.

Those who do use Bluebird, REDbird, or Serve can still benefit

Personally, I plan to continue to use REDbird to pay bills that cannot be paid with Plastiq (e.g. credit card bills), but I will also use Plastiq, as outlined above, to pay other bills.  In this way, I can easily increase credit card spend above the $5,000 per month (per card) allowed by Bluebird, REDbird, and Serve.

About Greg The Frequent Miler

Greg is the owner, founder, and primary author of the Frequent Miler. He earns millions of points and miles each year, mostly without flying, and dedicates this blog to teaching others how to do the same.

More articles by Greg The Frequent Miler »


  1. […] How to use Plastiq to increase spending on credit cards. By Frequent Miler. Interesting, I guess. Is Plastiq the new Redbird? Not sure about the economics and sustainability of this. And this assumes everything goes smoothly with your Amex gift cards. Never mind…I see Titan bloggers writing about this now tic tac. Maybe I should get a Plastiq account and pump that affiliate link too….I am just too lazy to do it. And I feel dirty […]


    • That’s not known. Right now its an open ended promotion. I’ve been told that if you setup repeated payments you can lock in the 1.99% fee long term even if you switch the payment source each month. Whether they will really fulfill that promise, I can’t say.

      • It’s limited time for new members. FWIW, They got quite lippy with me for requesting the new lower fees. They also pressed me as to where I got that info. All these billpay services seem to follow the same hostile arc with customers. Wish they would work out a few more kinks before slamming doors shut. Although, I suppose the MS exploits those kinks to some ends until worked out.

  1. AGCs are not free, 3.95 fee is at least 0.19% making effective cb rate 1.81 – 2.06 %, making this essentially break even at best. Add in opportunity cost of time value of money to get the cash back and you are not free.

    But let’s not let that get in the way of a good referral link pimp job just like all the other bloggers. You are better than this!

    • I agree that the net result may or may not be completely free, but the truth is that it depends: in some cases you pay a tiny net amount in other cases you earn a tiny net profit.
      I truly believe this to be an excellent opportunity that I’ve already started taking advantage of. If you disagree, that’s fine (and I welcome debate on the merits of the deal itself), but the idea that I wrote this for referral links is insulting.

      • It’s tough love because you are/were one of the few/only bloggers thinking and being innovative instead of copying and repackaging. That said there seems to be a return to the mean by beating on this (did the other bloggers magically get word at the same time on the same day with their referral links?. History says online payment systems such as this always die in a month or two at the most, so why the excitement besides a referral? So I get back to, you’re better than this! And that is a compliment and sign of respect.

    • Yes, breakeven at best, and then you get the miles/points from your credit card (say 1.5-2%), which is the whole point. And I’m not sure what your opportunity/time cost is, but if you’re reading this blog and taking the time to write snarky comments, I’m going to assume it’s a good deal lower than the $30+ per month in value (at the minimum, assuming $2000 monthly spend) in exchange for 5-10 minutes of your time.

      • Because something tells me it’s not as simple as getting them to mail Navient (formerly Sallie Mae) a check with my account number and hoping and praying that they credit it correctly. They claim that I need to remit a payment slip and all this other BS, so it seems like a major hassle to use this method to pay, or to use Serve to do it.

        • You can pay Navient student loan bill directly with a credit card by calling the automated phone number each month. Not well publicized but is easy breezy.

        • Just the main number on the website – 888-272-5543. Call, enter your account number, select “Payments”, “Make a Payment”, confirm payment amount, “Credit Card” (Visa/MC/Discover only), enter card number, expiration, billing zip, and done.

        • I just gave them a call and apparently they just changed it. Apparently you have to talk to a representative now to make the card payments. I really don’t want to talk to people that I’m pretty sure don’t know any good English.

  2. Although I’m not sure if I will use Plastiq, I signed up anyway so that you can get referral bonus (that you deserve for all the work you did to share information with all the readers). Thanks!

  3. Zozeppelin – even if it were break even after the ~2.25% cash back from agc and the fee to load, you would still earn the cc points which is what we are after in this case, not making $2

  4. Regarding “free”:
    I’ll admit that I oversimplified things by titling the post with the words “fee free”. The truth is that it IS possible to net fee free bill payments with this method, but it is also possible to end up with a small net fee. So, I altered the post title a bit and I added a fairly extensive section titled “The Math” where I laid out an example that results in very close to fee free bill payments. I also listed situations where it is truly NET fee free and where it is not. Even in the worst case scenario, though, the net fees become such a tiny percentage of the bill payments that even the worst rewards cards would more than make up for that tiny cost.

    • I really have trouble understanding the comments you’re getting. This is cheap points. Good stuff. Especially good for hitting minimum spends or bonuses based on spending. I chase 10k eqm for $40k spend. If I can get half of that by paying my mortgage plus 20k AA for not much in fees, that’s great. I fear this will go the way of evolve, but we will see soon enough.

    • I don’t get people’s narrow minded reaction to this article. Seems to say a whole lot about their pathetic outlook on life. People who take these types of articles and criticize every word looking for a reason to bitch are kind of sad. I have the Amex Everyday preferred card and I am going to definitely use this technique to generate spend.

      Thanks for the article and I have added you to my list of daily reads as I get more into this very addicting “hobby”


  5. FM, no one answered my questions from yesterday’s Plastiq thread but you basically answered them all in this article. I’m probably not going to do this but this line makes sense for why others that use Serve/Bluebird/Redbird would still use Plastiq: “can easily increase credit card spend above the $5,000 per month (per card) allowed by Bluebird, REDbird, and Serve.”

  6. Excellent information. Here’s my plan on using plastiq. We recently did an international summer trip to South America and I used Capital Venture Card that I signed up earlier and got the initial 40K points. I have several travel purchases that can easily be erased using plastiq.

    I do have free shipping plan with AmEX and have bought 20K worth of AGCs to get the 150K point offer earlier.

    So, with plastiq method I will be getting $6000 + $11.95 * 2 = 12023 points which will equal to $120.23 in erasing travel purchases. So, if I deduct let’s say $10 for fees, then I’ll still be ahead with $110 worth of travel charges erased.

    FM: Does this make sense to you before I jump on this deal?

  7. This is more effort than its worth. It’s really only worth out of you have really high bills, and of that’s the case there’s easier ways to make that couple percentage points like stop spending so much.

  8. So I just want to make sure I’m understanding correctly. TCB says “denominations over $2,000 are not eligible”, and above you’re saying that you can order 3 or 4 $2,000 gift cards. I haven’t ordered multiple before, so just want to make sure that an $8,000 order that only contains $2,000 and lower gift cards still gets credit. Agreed?

  9. what is the very best Mastercard to use besides Barclay Arrival?

    I assume the SPG Amex is the best, anyone disagree?

    • Depends on what you want to do with your miles/points. Using the $6000 example, there might be some that will just use a citi doublecash and net $120 when all is said and done…..

    • I’m not sure about the best MasterCard, but I think that a lot of people would consider the Amex EveryDay Preferred since it earns 1.5 points per dollar for all spend (as long as you make 30 or more charges each billing cycle)

        • It just depends whether you prefer to earn pennies or miles (Amex MR points transfer one to one to many airline programs). I’m not saying that it’s better than earning 2%. I was giving it as an alternative that some may prefer over the SPG card which essentially earns 1.25 miles per dollar (thanks to the way SPG points transfer to miles)

  10. I thought the cash back portals cap the 2.25 cash back to cards <= 2000. So if i buy 2 for 2000 each , wouldn't Amex report to portal that the total transaction for that session was 4000 in gift card purchase and as this exceeds the 2000 mark , portals will not pay me anything.
    is there something wrong with this argument?

  11. Just signed up for Plastiq and paid my car payment. Let see how long it takes for the payment. Thanks for the post.

  12. Can I send the rent cheque to my address and hand it over to the landlord instead of mailing to the landlord directly?

  13. FM — do you have any experience with using Amex Membership Rewards cards to buy Amex gift cards? I’ve read it works for minimum spend. How about points?

  14. I have a $5000 home repair bill to pay this month, with an invoice. Instead of sending a check, I will use Plastiq with Amex Fidelity. I will then take the additional 20 days of float interest on a 5% netspend savings account for a profit of $13. Yea, it’s only 13 dollars, but for me it is a free lunch.

    • You can do that, but the fees will add up: 3.5% for the $200 MasterCard at Staples, plus 2% from Plastiq. It can still be worth it if you don’t mind essentially buying Ultimate Rewards points for a bit more than 1 cent each.

  15. I know you can’t fund a savings account, but I’m wondering about sending a check to a brokerage to repay a margin loan.

  16. I assume you still have to do the annoying task of called the CS # on the AMEX GC to register your name and address for each card before they will work for something like this?

  17. How would I add a policy number or member ID number so that the insurance company knows that I am paying for that? Any one can shed light? Thanks.

    • I’ve only sent one small test payment, but there was a field to put in an account number or other reference number for the bill you are paying each time (not where you setup the payee). Waiting to see if my test payment posts correctly.

  18. Just tried placing my first order of AMEX gift cards. Never used them before but I thought I’d try out the Plastiq thing. Used a Chase card, and the order was rejected by AMEX with the same bogus “we can’t verify your info” thing many others have gotten. Seriously? First order ever, and I’m somehow already banned from buying from buying GC’s? And yes-I know that the address, zip code, etc were correct.

    • Unfortunately, that’s a common problem with Amex gift cards. In my case, that happens to me 100% of the time with personal cards, but I get approved 100% of the time with business cards. My wife gets her personal cards approved. I haven’t yet figured out the pattern.

  19. Ugh. I signed up, but apparently not through a link so I don’t get the 1.99%. When I try to create a second account, I get an error that says “oops error. contact us below.”


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