Pay any bill with a credit card

  Credit Card Reference

A variety of services let you pay bills using a credit card, even when credit cards aren't normally accepted. All these services charge “convenience fees” to cover the cost of the credit card processing fee and earn themselves a small profit. But, depending upon your circumstances, it can easily be worth paying fees in order to shift some of your spending to your credit cards.

Jump to

• Reasons to pay your bills with your credit card
• Paying Businesses with Plastiq
• Other options for paying rent
• Person to Person payments
• Paying Taxes
• Pay off your student loans or save for college
• Earning bonus points from bill payment services

Reasons to pay your bills with your credit card

There are several reasons why it might make sense to pay a fee to use your credit card to pay bills you would otherwise pay with a check or money transfer.

1. Finish meeting the initial spending requirement of a new credit card. If you find yourself coming up short, you can spend more on your credit card by paying a bill from someone who doesn’t normally take credit cards. Examples might be your rent or mortgage, car payment, daycare, etc. Chances are that you have enough expenses to finish meeting your initial spending requirement.

If the alternative is to not qualifying for the signup bonus, paying fees is usually worthwhile. For example, if you are $500 away from meeting the spending requirement, paying a 2.5% fee works out to $10 in convenience charges. This is much smaller than the value of most signup bonuses.

2. Increase the number of signup bonuses that you can collect each year. By shifting most of your expenses, including your rent or mortgage, to your credit cards, you can dramatically increase the total amount you spend on your credit cards each year, and therefore the number of signup bonuses you can qualify for. If you are really going to focus your energies on collecting signup bonuses, this can be worthwhile. With a 2.5% fee, it would cost $75 to pay enough of your bills to meet a typical $3,000 spending requirement.

However, if you pay fees to collect additional signup bonuses now, and then wind up just earning regular rewards for your normal credit card spending later, it isn't worth it. It would be better to simply spread out your credit card signups over time, and avoid paying extra fees.

3. Qualify for a special credit card benefit that requires a certain amount of spending. Shifting your expenses to your credit cards can help you meet spending requirements that unlock special credit card benefits. For example, the Delta Platinum card gives you 10,000 points and 10,000 Medallion Qualifying Miles, if you spend $25,000 per year. This may be hard to do naturally. However, if you are willing to pay a 2.5% fee, you might be able to shift $25,000 of additional expenses (that you could not normally pay with a credit card) to your Delta card. In the process, you’d be earning an additional 25,000 Delta points from the actual spending. If the 35,000 Delta points and 10,000 Qualifying Miles are worth $625 to you, this would be worthwhile.
4. Earn extra rewards. Some points and miles gamers take this a step further. If it is possible to earn more value in rewards than you’d pay in fees, you are “making” a bit of money on each purchase. For example, if you have a 3% cashback card, and you pay 2% in fees to pay your taxes, you are essentially earning a 1% rebate.

Paying Businesses with Plastiq

Plastiq lets you pay any business. You can use it to pay many different types of bills that you ordinarily couldn't pay with a credit card, like rent, mortgage payments, daycare costs, or housecleaning services.

Current Issues with Visa Cards

As of June 1st 2018, Plastiq is having issues with many Visa cards.

• Bank of America and Citibank credit cards will treat Plastiq payments as cash advances. As a result, the fees and interest charges will make it far too expensive to use these cards.
• Chase personal cards will limit total monthly Plastiq charges to 20% of your credit limit. This may limit your ability to use Plastiq as you intended.
• Capital One, Visa gift cards, and small business cards are unaffected.

Plastiq is working with Visa to hopefully restore the ability to use these cards with the normal fees and limits.

• Plastiq is the most flexible bill paying service. It lets you pay almost any bill with a credit card. If the company isn’t already in their database, they will simply mail them a check or send them an ACH transfer. You can even use it to pay individuals, such as babysitters, as long as you are paying for an actual item or service, and not just sending them money as a gift. One of the only other restrictions is that you can’t use it to send money to financial accounts, including paying off your credit card bills.


One small gotcha. If you use the service to pay someone who isn't in their database, certain Visa cards might code this as a cash advance, instead of a purchase. You don’t want this, as you’ll need to pay extra interest and fees, and it won’t count against your initial spending requirement.  But when this would be the case, Plastiq will warn you, and you can shift to another card or make the payment in some other way—so there is no need to worry.

• Mortgage payments can only be made with Mastercards and Discover cards. Rent can be paid with all cards. This situation has been in flux, so if you want to make a mortgage payment with a Visa card, you might do a quick online search to see if it is possible again.
• You can only use Amex cards for a limited set of payments. The only acceptable payments are for "Government, Utilities, Education (not including student loans), Residential Rent, and Club Fees & Memberships".

• Service fees are typically 2.5%, but they often have promotions, which can reduce the cost with certain types of cards. Plastiq is not particularly useful for liquidating gift cards, because they charge the full credit card fee, even if you are using a debit-based gift card.
• There are currently no cards that earn bonus rewards on Plastiq purchases. You used to be able to earn 3x points with the Chase Ink Preferred card. Even though the payments are online, you won't earn bonus points with the AT&T Access cards.

Other options for paying rent

Two specialized services focus on paying rent.

• Urbanr can only be used to pay rent (with participating landlords), but has a significantly lower convenience fee. Urbanr can only pay landlords who accept ACH payments directly to their bank accounts. Unlike the services above, they won't print and mail a check. But their current fee is only 1.5%. If your landlord already participates, or you can convince them to share their ACH information with UrbanR, you can save a significant amount of money on fees. They don't accept American Express.
• RadPad is another option that specializes in rent payments. Unlike UrbanR, you can use it for any landlord—they will print a check (if necessary). But, its convenience fee is 3%, which is higher than Plastiq. However, its fee for using a debit card is only $5 (for payments of $5,000 or less).

Person to Person payments

Services, like PayPal and Venmo, let you use your credit card to send money to anyone, and not just to pay a bill.

They do, however, require that the recipient also have a PayPal or Venmo account. You can always use these services to send money to your spouse or a close friend. Convenience fees are around 3%.

If you use these services just to shuttle money back and forth between people, you will eventually get shut down, However, you should be fine, as long as you primarily send money to people you actually owe money to. If you just want to shuffle money, have the recipient pay you back through an alternative channel, and not through the same service. Depending on your volume, you might not raise any flags.

These services are generally geared towards making smaller payments. If you use them to repeatedly make large payments, you will get shut down. For example, Venmo has an explicit limit of $2999/week, and only $299/week if you are just getting started.

Finally, Amex doesn't pay out reward points for these services.

Paying Taxes

• You can pay your federal taxes with a credit card, and depending on your state and county, you can also pay your state taxes and property taxes. Convenience fees are around 2%. When this was written, the lowest fee for federal taxes was 1.87%. These fees are cheaper than Plastiq. IRS Credit Card Payment webpage.

• Another alternative is to use your credit card to purchase (pin-enabled) Visa or Mastercard gift cards, and then use the gift cards to pay your taxes. The fees the tax payment companies will charge for using a debit card are very low, but there are additional fees to activate the gift cards. This approach doesn’t save you much money, but it can let you defer making your tax payment until a later date. You might even earn a better reward rate, if you can purchase the gift cards at a store that earns bonus rewards. The only limitation is that you are typically limited to two payments with each tax paying service for each tax payment time-period. Since gift cards usually have a $500 maximum, this limits the total amount of taxes that you can pay with this method. You may be able to bypass the two card restriction by calling in. The Frequent miler article below says this is possible with OfficialPayments.
• You can take advantage of any PayPal-related promotion by paying your taxes with PayUSATax. Occasionally, some credit cards will offer bonus rewards for PayPal purchases, and paying your taxes is a great way to multiply the benefits of this type of promotion.

Pay off your student loans or save for college

If you have student loans, you can purchase “Gift of College” gift cards and then use those cards to pay off your loans. Before you do, you need to go to their website, register for an account, and see if your student loan company is listed. The same cards can be used to add funds to any 529 account to put aside money for your kids’ education.

This can be a cheaper than paying them with Plastiq. The fee for a $500 gift card is only around 1.2%, but they aren't available in many stores. If you need to purchase online, you can only get cards up to $200 each, with a fee of about 3%.

Earning bonus points from bill payment services

If you are trying to optimize your rewards, you may want to take advantage of bill paying services that earn bonus rewards with your credit card, rather than just the base level of rewards.

• With the Altitude Reserve card you can earn bonus points by using Apple Pay to pay your rent through RadPad.
• Some rent/mortgage payments at Plastiq are coding as lodging and will earn bonus travel rewards. Like with any online purchase option, your mileage may vary. 

Credit Cards 101

Tips to Easily Meet the Initial Spending Requirements of New Credit Cards

Advanced Strategies for Collecting Signup Bonuses

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