Plastiq is a bill payment service. They charge your credit card and sent a check to someone you owe money to. This can be useful for several reasons:
- Float, you pay someone today but if it’s the beginning of a credit card billing cycle you may not have to cover the funds for nearly two months
- Earning miles or other rewards
- Reaching spend thresholds, for instance I want to put $50,000 on my Barclaycard AAdvantage Aviator Silver next year to earn 10,000 elite qualifying miles, 6000 elite qualifying dollars, and a companion ticket for American Airlines
There are a whole lot of compliance hoops that Plastiq needs to go through in order to offer this service — to classify payments as purchases and not cash advances, to avoid running afoul of federal rules — so the first time you make a payment to someone you may be asked to substantiate the payment. And they’re mailing physical checks that takes time. Be sure to build that into when you make a payment to avoid being late.
Recently American Express stopped processing payments with Plastiq. They suggested this was temporary, I’m surprised by how temporary it was, since they’re back processing American Express cards for payments again. Note though that they don’t take Amex for everything — notably mortgage payments.
According to Plastiq’s terms,
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.
Plastiq is not taking American Express or Visa or mortgages (and the Visa restriction isn’t in the terms). If you want to pay a mortgage using Plastiq you’ll need to use a MasterCard. (This is great for me since it will help me with American Airlines qualifying miles and qualifying dollars.)
Some payments to merchants that haven’t been paid via Plastiq before will generate cash advance fees when using a Visa. However Plastiq will warn you in advance of this. Make a payment to that merchant with another card, then there’s an established Plastiq relationship with the merchant, and future payments can be made with Visa.