Want to pay almost any bill with a credit card? You need Plastiq

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Imagine paying your car loan with a credit card or paying rent on the first of the month but actually delaying that payment until the 15th. This is the promise of Plastiq, an innovative payments platform that lets you pay almost any bill with plastic regardless of available payment methods.

Plastiq gives you the opportunity to earn rewards on purchases you haven’t been able to in the past, but it can also help with your cash flow. Of course, there is a catch. Like most valuable tools, Plastiq isn’t free to use — at least not all the time.

In this Plastiq review you’ll learn what Plastiq is, how Plastiq works, how to pay a bill with it, how to avoid Plastiq’s fees and more.

What is Plastiq?

Plastiq is an online payment service that lets you charge almost anything to your credit or debit card. It’s useful for paying large transactions like rent, car loan payments or tuition, which typically require payment via check or bank transfer, and therefore don’t let you earn credit card rewards or defer payments like you could with a credit card.

How does Plastiq work?

When you pay a bill via Plastiq, Plastiq works by paying your recipient via their preferred payment method (paper check, ACH bank transfer or wire transfer) while letting you charge the payment to your credit or debit card.

These payment methods have different delivery timelines, which you’ll need to account for when paying your bills:

  • Paper check: between two and seven business days
  • ACH bank transfer: between one and three business days
  • Wire transfer: same day

How to use Plastiq to pay a bill

To pay a bill via Plastiq, you’ll need to create a free Plastiq account, connect a credit card or bank account to it, add a recipient and their payment information and provide payment instructions and details. Here’s a step-by-step look at the process:

Create a Plastiq account

Visit Plastiq.com and click the “sign up” button. You’ll need to provide your email address, enter your name and set up a password. Then, decide how you’ll use Plastiq: for paying bills or for accepting payments.

Next, confirm how you’ll make payments: for your business, yourself or a combination of both. While we’re focused on explaining how to use Plastiq to pay personal bills, you can select the option that best suits your needs. Plastiq will send you verification codes to confirm your phone number and email address.

You’ll need to add a payment method by providing your credit card details or linking your bank account. Once your account is active, you can make a payment.

Make a payment with Plastiq

While in “pay” mode, select “bills” and then “manually pay a bill.” If your recipient is in Plastiq’s database, their payment information is already on file. If not, you’ll need to add it. Your recipient doesn’t need to have a Plastiq account or pay anything to receive payment.

Add a recipient by inputting their name and account and routing numbers (for a bank transfer) and/or their mailing address (for check payment). You’ll also need to describe the goods or services they provide.

Then, enter details for the bill you want to pay, including the amount and the payment method you want to use, as well as an optional invoice number and memo.

Plastiq’s fees and how to avoid them

While having a Plastiq account is free, the service charges the payer the following fees:

  • Credit card and debit card payments: 2.85 percent
  • Bank-to-bank ACH transfers or EFTs: Free
  • Wire transfers: $40 for U.S. domestic, $60 for international

This means that if you were to charge a $1,000 rent payment to your credit card via Plastiq, you’d pay an additional $28.50 in fees, so the transaction would appear as $1,028.50 on your credit card statement.

How to avoid Plastiq’s fees

The most obvious way to avoid Plastiq’s fees is to use its bank-to-bank transfer option. However, many services offer free bank transfers; what makes Plastiq stand out is that it lets you charge large payments to credit and debit cards.

To circumvent the 2.85 percent fee for paying with plastic, Plastiq offers a referral program. If you refer someone who uses Plastiq to make at least $500 in payments, you’ll be rewarded with 100 Fee-Free Dollars (FFDs), which translates to $100 in payments you can send without being charged a fee.

Let’s say you earn 100 FFDs by referring a friend who makes the qualifying amount of payments. The next time you go to put a $1,000 bill on your credit card via Plastiq, you’ll owe fees on the first $900, translating to $25.65, instead of the full $28.50.

If you are able to convince friends and family to use this service via your unique referral code, you may be able to process a portion of your monthly bill payments through Plastiq for free.

What bills can I pay with Plastiq?

Plastiq is most advantageous when used to pay large bills that you may not usually be able to put on a credit card, such as:

  • Rent payments
  • Car loan payments
  • College tuition
  • Daycare
  • Payments to contractors
  • Utility
  • Medical bills

While the sky is almost the limit with what you can use Plastiq for, you can’t use it to purchase investments, “debt products,” or pay other individuals. So no, this is not a Venmo alternative.

Best credit cards to use with Plastiq bill payments

Given Plastiq’s significant transaction fees, the best card to use with Plastiq is one that offers a generous welcome bonus. Paying a large bill through Plastiq may be worth it if it helps you reach the spend requirement to earn a sign up bonus (as long as it’s worth more than you’ll pay in fees).

Best credit cards with attractive welcome bonuses to use with Plastiq

  • The Chase Sapphire Reserve® credit card offers 50,000 bonus points — equivalent to $750 when redeemed via Chase Ultimate Rewards® — when you spend $4,000 within the first three months of opening your card.
  • The Chase Sapphire Preferred® Card is currently offering 60,000 bonus points — equivalent to $750 via Chase Ultimate Rewards®—when you spend $4,000 within the first three months of opening your card.
  • The American Express® Gold Card will reward spending $4,000 on eligible purchases within the first six months of card opening with 60,000 Membership Rewards® Points, worth between $360 and $600.
  • The Platinum Card® from American Express offers new cardholders 100,000 Membership Rewards® Points, worth between $420 and $1,000, after spending $6,000 within the first six months of opening.

Can you earn credit card rewards on Plastiq payments?

You might also be able to earn rewards on bills paid through Plastiq, but keep in mind the 2.85 percent fee. To come out ahead, your rewards rate would need to be higher than that. While many cards offer bonus categories with 3 percent or more on certain purchases, be sure to check with your issuer how it categorizes Plastiq payments. A Plastiq payment may register in your transactions as a service rather than as the category of the specific bill you’re paying.

Benefits and downsides of Plastiq

Benefits of Plastiq

Despite the steep fee for card payments, there are several benefits that make paying bills with Plastiq worthwhile:

  • Earn rewards: Using a credit card to pay bills you could previously only pay with check or via bank transfer gives you more opportunity to hit the minimum spend requirements for credit card welcome bonuses.
  • Improve cash flow: If your rent is due on the first of the month, but you don’t quite have the money, Plastiq lets you pay your bills on time without parting with your cash until your credit card bill is due, saving you from taking on extra interest or a risky loan.
  • Avoid costly late fees: If you are on the brink of making late payments, Plastiq will let you pay bills on time (and avoid late fees) with a credit card you can pay off over time. Just remember that the debt is still there — it’s just on a credit card now, potentially earning interest.

Downsides of Plastiq

Consider these disadvantages of Plastiq before using it to pay all your bills:

  • Fees may outweigh the rewards: Unless you’re getting every transaction for free by referring your friends, Plastiq’s transaction fees will likely outweigh the rewards or cash back you’re getting. You need a card that gives you at least 2.85 percent cash back to break even when you use this service.
  • Pricier payments: If you start paying all your bills through Plastiq for convenience or rewards, you will quickly find you’re paying 2.85 percent more for almost everything in your life. These fees can add up quickly, particularly when you’re using the service to pay recurring bills, such as rent or tuition.
  • Credit card interest and debt: The average credit card interest rate is over 16 percent, making long-term debt on credit a costly proposition. You should only use Plastiq when you can pay your credit card bill in full each month.
Written by
Ana Cvetkovic
Personal Finance Writer

About the author

“As a self-taught entrepreneur, I turned to podcasts, books, blog posts from sites like Bankrate and CreditCards.com, and fellow business owners to learn how to manage my business’s finances. I am passionate about making information about business and personal finance more accessible and easy to understand.” - Ana Cvetkovic

Experience

When Ana’s family moved from Serbia to the United States when she was four years old, she never expected her version of the American dream would involve starting a business. By the age of 23, Ana leveraged her college food blog, Better Than Ramen, to land her first freelance writing client in the restaurant technology industry. Since then, her side hustle has developed into BLOOM Digital Marketing, a marketing agency that services all kinds of clients. Ana’s interest in finance developed out of her own entrepreneurial journey. As a business owner, she has first-hand experience with the topics she covers for Bankrate. As a finance expert, Ana has ghostwritten for CFOs of fintech companies and authored resources that help small business owners, finance departments, and everyone in between. You can learn more about Ana’s work on LinkedIn, Twitter or her website. Ana holds a bachelor’s degree in Journalism and Mass Communications from the George Washington University.
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