How to dodge Plastiq cash advance fees

Plastiq is a bill payment service that lets you pay almost any bill with a credit card in exchange for a 2.5% fee.  Paying rent, tuition, or other big expenses through Plastiq can be a great way to meet minimum spend requirements for new credit cards. For more details about Plastiq, please see: Complete guide to Plastiq credit card payments.

But, if you try to pay a new recipient with a Visa credit card, you may get this warning: “PLEASE NOTE: Because Plastiq does not have a relationship with this recipient, this Visa credit transaction will be treated by your issuer as a cash advance.

Bummer.  You certainly don’t want to go through with that payment as-is since cash advances incur fees, do not earn rewards, and do not help you meet minimum spend requirements.  They’re nasty all around.

Important: If you don’t see a warning like the one above, then you are safe. You will not incur a cash advance fee

Fortunately, there are two easy workarounds to the cash advance issue…

1. Make your first payment with Amex, Discover, Mastercard, or debit card

Only Visa credit cards run the risk of getting cash advance fees through Plastiq.  And this only happens when you make the first ever payment to a recipient.  If you make your initial payment with a different type of credit card (2.5% fee), or with a debit card (1% fee), then you can make future payments to the same recipient with your Visa card and you should not get the above warning, nor should you get charged a cash advance fee.  Important: You may have to wait until your first payment is deposited before the warning goes away.

2. Ask the recipient to register with Plastiq to accept payments

Obviously this option works best if you personally know the intended recipient.  If there’s a business or contractor that you’d like to pay by credit card, you can ask them to register with Plastiq to accept credit cards.  There is absolutely no fee to register.

Send them here: www.plastiq.com/accept

Don’t forget: Plastiq no longer accepts Amex or Visa cards for most mortgage payments

The above steps work to avoid cash advance fees when paying rent or other miscellaneous bills, but it will not get you around the mortgage ban.  Most mortgage companies (but not all) can no longer be paid through Plastiq with Visa or Amex cards.  The best way to test whether your mortgage can be paid with Visa or Amex is to try it.  If Plastiq.com allows the payment to go through, then you should be fine.

You can also, of course, continue to pay mortgage with Mastercard or Discover.

See also:

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.

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21 Comments on "How to dodge Plastiq cash advance fees"

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Neil
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Are there any other ways to pay your mortgage with an Amex or Visa? I’ve only used Plastiq in the past.

J
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Can I make car payments to a CU?

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[…] How to dodge Plastiq cash advance fees by Frequent Miler. Nice quick tip here, didn’t realize you could pay with another issuer first and then switch to Visa to avoid this. […]

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[…] How to dodge Plastiq cash advance fees […]

JR
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Hmm..I sent a payment via an Amex first. After that completed successfully, I tried to pay via Visa and I still got the cash advance warning message. Same recipient.

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[…] ** You can avoid cash advance warnings by making an initial payment to this recipient with a different type of credit card. Future Visa payments will then be OK.  For more details see: How to dodge Plastiq cash advance fees. […]

physixfan
Guest

After about 3 days, the Visa cash advance warning is gone, and now I can pay the bill with Visa cards. Thanks for the great info here, Greg!

Chris
Guest

I made a mistake trying to get around the cash advance fee.

I tried to pay via my LMCU visa debit card first. I spend a week trying to get them to reduce the fee from 2.5% to 1%. They didn’t budge even after sending in a screenshot of some debit card transactions. They said the BIN was not being reported as a debit card. I ended up sending the payment anyway with the higher fee.

After a couple weeks of waiting for the cash advance warning to be removed, I realized my mistake. I still did not make a payment with a debit card (from Plastiq’s point of view). Doh!

Craig
Guest

One more recent data point – consistent with Greg’s instructions in the post and with Chris’ experience last month:

This payment was to my HOA for my annual dues.
12/11 – Initial payment processed, made via MCard
12/21 – Email from Plastiq; initial payment deposited by HOA
12/22 – Successful payment of remaining balance via Visa, no cash advance fee

I checked Plastiq on approx 12/18 and again on 12/21, and the cash advance notification still showed for Visa payments. 12/22 was the earliest day that I could make the payment without it showing as a cash advance.

Thanks, Greg, for the good post on this process!

David
Guest

What if you have incurred the cash advance fee? Is there a way to cancel the transaction and pay with another card? If not, will future payment be okay now if I swallow whatever the cash advance fee incurred?