Complete guide to Plastiq credit card payments (2019)

Plastiq is an online bill payment service that lets you pay almost all of your bills by credit card.  This can be a great way to reach spend targets for new credit card signup bonuses.  Unlike a few similar services, Plastiq is not limited to billers in their database.  Plastiq can be used to pay nearly any biller in the US. or Canada.  Payees not in their database are paid by check.

The catch?  A fee is charged to the payer (not the payee) for each payment.

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Quick info

  • Standard credit card fee:  2.5%, but lower promotional rates are sometimes available.
  • Standard debit card fee: 1%. Unfortunately, gift cards and prepaid cards are treated as credit cards.
  • Visa, MasterCard, Discover, and Amex cards are accepted
  • Credit card payments count as purchases, not as cash advances (Note: As of 10/19/16 Visa payments where the payee has no relationship with Plastiq may be put through as a cash advance. If you don’t get a warning, then you’re fine. More info here.)
  • Amex gift cards, and Visa and MasterCard gift cards are accepted.
  • Plastiq sometimes requires proof that you are paying a legitimate expense. They may ask you to email an invoice, for example.
  • Plastiq does not submit tax forms on behalf of customers or payees
  • Some people have asked if they can have checks that are addressed to others sent to their own house so that they can submit the check with a payment stub or so they can hand the check to the payee directly.  Plastiq does not allow this.

What’s new with Plastiq?

What Works? What Doesn’t?

* Amex payments are limited to the following industries:

  • For Recipients in the United States, the use of American Express cards is permitted for the following industries: Government, Utilities, Education, Residential Rent and Club Fees and Memberships.
  • For Recipients in Canada, the use of American Express cards is permitted for the following industries: Government, Utilities, School, School K-12 and Residential Rent.

** 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.

Under certain circumstances consumer Visa cards don't work with Plastiq. The following payments are fine:

  • Rent (residential rent, HOA fees, and commercial rent)
  • Taxes & government fees
  • Utilities (electricity, cable, internet, and telecom)
  • Tuition (including daycare and camp)
Payments outside of the above list are subject to the following limitations:

  1. Payments using personal Visa cards issued by Chase are subject to a limit of 20% of your credit limit.
  2. Payments using personal Visa cards from other issuers (other than Capital One or Wells Fargo) will code as a cash advance. That means you’d incur cash advance fees and wouldn’t earn any credit card rewards.
  3. The following types of Visa cards are not affected by these changes: Capital One personal Visa cards, Wells Fargo personal Visa cards, Visa business credit cards, Visa corporate, debit and prepaid gift cards.

Referral Program

If you are new to Plastiq and you sign up through a friend-referral, you’ll earn 500 Fee-Free dollars (FFDs) once you’ve paid $500 worth of bills with Plastiq.  FFDs are used to make payments without fees. 500 Fee-Free dollars means that you can pay $500 worth of bills for free (so 500 FFDs are worth 2.5% of $500 = $12.50).

The deal gets even better when you refer friends.  For every person who registers with Plastiq via your referral link, you’ll get 1000 FFDs (worth $25) and that person will get 500 FFDs once they’ve paid $500 worth of bills with Plastiq.

If you’re new to Plastiq, consider using my referral link with my thanks: plastiq.com/frequentmiler.

Is Plastiq reliable?

I’ve made many bill payments through Plastiq and haven’t had any serious problems. In my experience, payments are typically delivered in about a week, but sometimes take as long as 2 weeks.

However, quite a few readers have reported problems with Plastiq.  Reported issues include:

  • Errors when trying to make payments (Note: this happened to me when I tried to schedule a recurring payment with a new payment source. After I made a single immediate payment, the problem cleared up)
  • Extremely long payment delivery times
  • Extremely long wait for a returned payment to be re-credited (Note: I had one cancelled payment which was re-credited immediately so YMMV)
  • Requirement to send rental agreement or invoice to Plastiq support when paying individuals

If you plan to try out Plastiq, I highly recommend submitting payments far in advance of their due date until you get a better idea of how long those payments take to process by Plastiq and by the payee.

Reasons to consider paying bills with Plastiq

Since Plastiq charges a fee for credit card payments, I wouldn’t recommend using Plastiq to pay bills that can already be paid by credit card with no fee.  For those bills that can’t already be paid by credit card, though, there are a number of reasons to consider Plastiq:

  • Easy way to meet credit card bonus minimum spend requirements.  See: Best credit card offers.
  • Earn credit card rewards.  It is ideal to use Plastiq when the value of your credit card rewards outweigh Plastiq’s fee.  See: Best rewards for everyday spend.
  • Earn credit card “big spend” bonuses (bonus points, free nights, companion tickets, elite status, etc.).  See: Best Big Spend Bonuses.
  • Some credit cards and debit cards offer rewards for frequent use. One example is the Amex Everyday Preferred card that offers a 50% bonus for every billing cycle in which you make 30 eligible charges.  Plastiq can be used, for example, to make weekly payments to a variety of payees in order to help increase your per month charges.
  • Convenient to consolidate all bill payments to a single service and/or credit card.
  • It is safer to pay by credit card for services or goods not yet fully delivered because it gives you the ability to initiate a credit card chargeback if the payee doesn’t deliver as promised.
  • Plastiq makes it possible to pay bills when you do not have the cash readily available. While it is never a good idea to go into credit card debt, paying by credit card can give you more time to get the required funds.

Example Payments

Almost any business or person in any industry and for any amount can be paid on Plastiq so long as there is a good/service being provided. This list should give you some ideas, but please check against the chart above to see which credit card types allow each type of payment:

  • Car payments (monthly leases)
  • Rent
  • Mortgage (NOTE: Amex and Visa credit cards cannot be used to make mortgage payments)
  • Taxes
  • Tuition
  • Condo fees
  • Insurance
  • Contractors
  • Nannies, babysitters
  • Landscapers
  • Purchase car, boat
  • Professional services: Law firms, Accounting firms, PR agencies, etc.
  • Sports clubs/country clubs/social clubs

Special notes:

  • Payments to individuals are allowed in exchange for goods and/or services but you may need to supply an invoice to Plastiq to get the payment through
  • Payments from outside of the US/Canada are allowed as long as recipient is in US/Canada

Payments not allowed

  • Payments to credit cards
  • Payments to self
  • Payments to friends or relatives*
  • Payments to recipients outside Canada and US (note, the sender can be from outside Canada and US, just not the recipient)
  • Payments to savings accounts, trust accounts, retirement accounts, health savings accounts, or similar
  • Payments to 529 Education Savings Programs
  • You may not send payments to your own address so that you can include your bill’s pay stub when you send in the check.  Instead, put your account number and other relevant info into Plastiq’s memo field.
  • Mortgage payments cannot be made with Amex or Visa credit cards (MasterCard, Discover, and even Visa debit cards are fine, though)

It is in Plastiq’s discretion to refund or void any payments like those above that are not allowed.

* Paying friends or relatives is not allowed unless friends/relatives provide truly billable services.  For example, if your uncle is your landlord, you could pay rent to your uncle through Plastiq.

Official details of what is allowed can be found in Plastiq’s terms of service section 4.1.

Businesses

Businesses can use Plastiq for many purposes, such as:

  • Paying vendors and suppliers
  • Paying employees and contractors

I believe that bill payment fees are legitimate business expenses that will reduce your businesses taxable profits.  So, the net cost to your business, after taxes, will be less than Plastiq’s fee.  Note: I am not an accountant so you should not take this as professional advice.

Paying Taxes

Plastiq can be used to pay federal or state taxes.  To do so:

  1. Go to Plastiq’s US tax page.
  2. Select whether you are paying federal or state taxes, and which state you are from.
  3. Pick the type of tax you’d like to pay.
  4. Click “Pay my taxes” and sign into your account.

Note that for federal taxes there are other options for paying with credit and debit cards with lower fees.  See: Complete guide to paying taxes via credit card, debit card, or gift card.

Gift cards

Visa, MasterCard, and Amex gift cards are allowed. To use a gift card, simply add it as a new payment card, then select it as your payment source when paying a bill.

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 bought the gift cards at a discount, or that you earned cash back through a portal, or that you earned extra rewards by buying gift cards at an office supply store, etc.

In my experience, 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.

UPDATE 7/5/2016: Two separate readers have reported that Plastiq had imposed a monthly limit on the number of gift cards they could use. Plastiq tells me that this limit is not universal.  This restriction is only in place in certain situations.

How long does a payment take to be delivered?

In my experience, payments usually take about a week, but two weeks is not unusual.  Keep in mind that the payee who receives the payment may take even longer to process the payment, so it is important to have payments sent well in advance of their due date.

Regarding comments: Comments posted at the bottom of Frequent Miler pages and posts are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.

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