Everything you need to know about Plastiq

Credit cards can come with some pretty valuable perks, including the potential to earn rewards or gain insurance protections on high-value items you buy. Meanwhile, paying with a credit card lets you buy some time before your payment is actually due, which can help you improve your personal or business cash flow.

Unfortunately, paying some bills with a credit card can be problematic or impossible, mostly due to the fact that not all vendors accept credit cards as payment. For that reason, many small business owners and individuals look for a workaround that lets them use a credit card for purchases and bills when they want to – and not just when they can.

What is Plastiq?

Enter Plastiq.com – a third-party platform that aims to help you pay almost any bill you want with any credit card of your choosing. With Plastiq, business owners and individuals can strategically cover expenses with credit – for example, business expenses, vendor payments, rent, taxes, utilities, rent or a mortgage.

While Plastiq isn’t free to use, there are several ways using Plastiq can still leave you “ahead.”

For example, paying through Plastiq may let you access early pay discounts you wouldn’t be able to access otherwise, and you can use it to meet a minimum spending requirement to earn a sign-up bonus on a rewards credit card.

On the other end of the spectrum, Plastiq also offers tools that can help you accept credit cards as payment with no fees to you. With Plastiq Accept, your customers will be able to pay you with credit cards, and they can pay the 2.85% fee on their end upfront.

How does Plastiq work?

Plastiq is a website and app that lets you enter your credit card information and information on the bills you want to pay. Once you provide the details of the transactions you want to make, Plastiq pays your vendors electronically or via check and charges your chosen credit card for the amount.

To get started with Plastiq, all you have to do is open a free account and enter information on the bills you hope to pay and the credit cards you want to pay with. Plastiq will actually process the credit card charges, and each payment will show as “Plastiq” on your credit card bill.

The person or business you’re paying will receive their cash, and you’ll get the benefits of using a credit card as payment.

What does Plastiq cost?

Plastiq fees depend largely on how you use the platform to pay bills. If you use a credit card on the platform, you’ll pay a Plastiq fee of 2.85% for each purchase you make. That means you’ll fork over $28.50 for every $1,000 in bills you pay.

If you use a debit card, on the other hand, your Plastiq fee will only be 1% of each bill you pay. However, it’s unlikely you would want to use a debit card to pay bills through this platform since most of the benefits of Plastiq are derived from using a credit card.

Benefits of Plastiq

Why would you want to pay bills through the Plastiq app? If you ask most people why they use this service, it comes down to the fact they can pay more everyday bills with a credit card this way.

For example, you can use Plastiq to pay a contractor to work on your home even if they don’t accept credit cards as payment. You can also pay taxes using Plastiq, utility bills, vendors who deliver your inventory and more.

Potential benefits of using Plastiq include:

• The ability to earn credit card rewards on bills you can’t normally pay with a credit card
• The ability to accept credit cards as payment without fees on your end
• Manage cash flow better
• Access early pay discounts
• Use the Plastiq website to schedule payments in advance or set up recurring payments
• Refer-a-friend program lets you earn free bill payments (you’ll earn $100 in fee-free dollars for each person you refer who makes $500 in payments through the platform)

At the end of the day, the benefits of Plastiq depend largely on how and why you use it. You can use Plastiq to boost the rewards you earn with a big sign-up bonus, but you can also use it to stay on top of bills when cash flow is right. On the other hand, you can use Plastiq Accept to accept credit card payments for convenience.

Drawbacks of Plastiq

By and large, the fees you’ll pay to use Plastiq are the major downside you should be aware of. After all, most rewards credit cards don’t offer a high enough percentage of cash back or points to compensate for Plastiq fees over the long haul.

Outside of the fact that Plastiq is not free to use, other downsides include the following:

• You can’t pay a mortgage with Visa or American Express credit cards (only Mastercard or Discover)
• Paying with Plastiq adds extra processing time to your bills, and payments can be slow
• Credit cards tend to charge high interest rates, so you’ll wind up paying significantly more for your bills if you carry a balance

Is Plastiq safe?

Plastiq does store credit card info directly, and because of that, it adheres to the highest standard of industry security, known as PCI (Payment Card Industry) Compliance Level 1, said Plastiq co-founder Eliot Buchanan. PCI Level 1 involves annual assessments by outside assessors in addition to other security measures.

Plastiq also uses two-factor authentication on their accounts, and they keep your information secure using AES 256-bit encryption.

Keep in mind that credit cards come with zero liability protection on their own, so you won’t be liable for any purchases made with your credit card if someone gets your account information and makes a fraudulent purchase.

Plastiq for small business owners

While Plastiq.com is commonly used by individuals who want to boost their rewards or pay bills with credit for other reasons, this service is also popular with small business owners. After all, Plastiq lets businesses pay vendors with a business credit card, which can help them improve their cash flow during tight times. Like individuals, businesses can also use Plastiq to earn rewards on all their business spending and bills.

On the other side of the equation, we already mentioned how a feature called Plastiq Accept lets you accept credit card bills as payment without any fees. Just keep in mind that Plastiq fees are passed on to your customers or clients when you use this service, which may or may not make sense for the way your business operates.

Bottom line

Generally speaking, you’ll be a lot better off using Plastiq if you only do so with a plan in mind. For example, you can use it for a short period of time to charge enough bills to meet a new credit card’s minimum spending requirement, or you can use it to pay bills with plastic in the short-term when cash flow is tight.

Just try to avoid a situation where you’re using Plastiq to rack up credit card balances you can’t afford to pay off. Since Plastiq fees make your bills more expensive and the average credit card interest rate is over 16%, using this platform without a plan could cost you.