Is it worth paying a fee to earn miles with Plastiq?

A few weeks ago, a Twitter follower asked me about whether it makes sense to pay a 2.7% fee in order to earn miles on rent payments through Plastiq. After all, considering there are ways to generate free manufactured spending, why would anyone pay almost 3% in fees?

My answer was, yes. I got a bit of blow-back fro this, but I think there are definitely scenarios where using Plastiq to make payments (and sometimes incurring 2.7% in fees) makes sense:

Meeting credit card spending requirements

If you’re trying to meet large credit card spending requirements and don’t have any gift card churning resources, then using Plastiq for rent payments can make total sense.

On a $2,500 payment, the Plastiq fees would amount to $81. That’s about what I pay for $10,000 worth of manufactured spending, so clearly it’s not ideal.

But if you can’t MS via Visa gift cards or merchant gift cards, then paying that $81 is worth it to secure a large credit card sign-up bonus.

Utilizing Plastiq’s fee-free dollars

Plastiq has a referral program that helps cut down on processing fees. For every person you successfully refer, Plastiq will issue you 1,000 fee-free dollars. What constitutes a “successful” referral? When the person pays at least $500 worth of bills through Plastiq.

If you’re not currently a registered Plastiq user, you can sign up with my Plastiq referral link and get 500 fee-free dollars right out of the gate.

How do Plastiq’s fee-free dollars work? Basically, the number of FFD’s in your account refers to the payment portion that you will not have to pay fees on. For example, if you’re making $2,500 worth of payments through Plastiq and you have 1,000 fee-free dollars, you will only pay the 2.7% fee on the remaining $1,500.

Plastiq reduced fee promotions

Occasionally, Plastiq will run promotions offering lower fees for certain credit cards. This past summer, Plastiq offered a 1.75% promotional fee on “business services payments” made with a MasterCard.

While 1.75% is still higher than what I’m willing to pay to earn miles, it does amount to less than the fees incurred when buying miles during most point promotions. So if you’re one of those people who regularly purchases miles at around 1.8 cents each, then paying the 1.75% Plastiq fee works out cheaper.

While a 2.7% fee seems a high price to pay for the privilege of earning points and miles, it can also be worth it. Really, the only scenario where I would recommend paying it is if it’s your only option for meeting spending requirements.

Other than that, there are ways to reduce and even offset Plastiq processing fees altogether. My point is, don’t count Plastiq out as a point-generating resource just because of the high processing fee. There are ways around it.

What are your thoughts on using Plastiq to generate points and miles? What is the maximum fee you’re willing to pay to earn credit card rewards?