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:

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 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:

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