Targeted Plastiq promotions: Earning FFDs vs. 1.5% fees

Plastiq is running targeted promotions through October 31 that can help you save some cash if you regularly use the service to earn miles on mortgage payments. You can choose between earning Fee-Free Dollars (FFDs) for future payments or getting a discounted 1.5% fee. So which of these offers should you go with? That depends largely on how big your payments are and how often you use Plastiq.

Option 1: Get a reduced 1.5% Plastiq fee on three payments less than $2,000 each

Plastiq normally charges a 2.5% fee on payments, so a reduced fee of 1.5% is pretty significant. With this option, you get a reduced fee on up to three payments of less than $2,000 each. 

Now you may wonder whether paying 1.5% is worth it. After all, that equates to a $15 fee per $1,000 payment. Why not just go to Simon Mall and buy a $1,000 Visa gift card for $3.95 to earn miles? That’s certainly an option. However, if you have a card that earns more than 1.5% cash back, you can come out ahead with this promotion.

For example, if you’re in your first year of having the Discover It Miles Card or Chase Freedom Unlimited, you’ll earn the equivalent of 3% cash back. With the Chase Freedom Unlimited, you can even convert your cash back to Chase Ultimate Rewards points, if you have another Ultimate Rewards-earning credit card.

Just keep in mind that you can’t make mortgage payments through Plastiq with a Visa credit card. You can, however, use your Visa to pay things like your car payment, landscape company, student loans, etc.

To qualify for the reduced 1.5% fee, your payments must be scheduled to be processed by October 31, 2019.

Option 2: Make two $2,000+ payments and get up to 5,000 FFD’s

You can earn up to 5,000 Plastiq FFDs if you make at least two payments of $2,000 or more by October 31. Plastiq will match the largest payment with up to 5,000 FFDs. How does this work exactly? 

Let’s say you make a $3,500 mortgage payment through Plastiq and then throw in a $2,000 payment to a vendor. You’ll earn 3,500 FFDs. You can earn up to 5,000 FFDs this way. They’ll appear in your account by November 15, 2019.

A year ago my boss allowed me to make a $14,000 payment to our mobile app developer through Plastiq. I was trying to meet the Amex Platinum spending requirement without manufactured spending and this made it so easy.

I had tons of FDD’s to cover most of the fee, so I was happy to knock out the spend. If you’re in a similar situation, this promotion might be worthwhile. Just keep in mind that you can’t make a mortgage payment through Plastiq with an Amex card. 

A huge caveat, however, is that you still have to pay the full 2.5% fee on payments exceeding $2,000. How does that stack up against the 1.5% fee promotion? I’ll break it down with an example below.

Which option should you choose

In terms of which promotion to choose, go with the one that coincides with your upcoming payments. But what if you’re flexible? Should you combine or split payments in order to qualify for one promotion over the other? Let’s take a look at a few different scenarios and which offer works out cheapest:

Scenario #1

Let’s say you have $4,500 worth of eligible payments during this promotion. You can take advantage of offer #1 by splitting it into three transactions under $2,000 and paying the reduced 1.5% fee. Your total cost would be $67.50 for $4,500 worth of payments.

Scenario #2

If you instead split your payment into two ($2,000 and $2,500), you’ll pay $112.50 in fees. At the same time, you’ll also earn 2500 FFDs for future use. Meaning your next payment of $2500 will be fee-free. That’s a potential saving of $62.50.

The total cost would be $112.50 for $7,000 worth of payments. The fee amounts to 1.6% of the total spent.

Scenario #3

If you split a $4,500 payment into three transactions, you might be able to take advantage of both Plastiq offers:

• Payment #1 for $2,000 (x 2.5% Plastiq fee = $50)
• #2 for $2,000 (x 2.5% Plastiq fee = $50)
• #3 for $500 (x 1.5% Plastiq fee = $7.50)

In this scenario, you’d spend $107.50 on fees and earn 2,000 FFDs for future payments. Those FFDs could be worth up to $50.

So, your total out-of-pocket cost would be $107.50 for $6,500 worth of payments, or 1.65% in fees.

Scenario #1 works out the cheapest, though scenario #2 helps you to spend more for less. Ultimately, the best choice depends on how many payments you plan on making through Plastiq this month and for how much. And whether splitting them makes sense for you.

Earning Plastiq FFDs

If you’re new to Plastiq, you can earn 500 FFDs by registering with my referral link and making your first payment. You can also earn 1,000 FFDs by referring others. Feel free to share your own link in the comment section.