Problems with Plastiq Payments on Personal Visa Credit Cards

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Plastiq, the online payment processing system that allows you to pay bills that you otherwise could not pay on a credit card for a 2.5% fee, is having trouble with many  consumer Visa credit cards. For the time being, bills paid with many (but not all) personal visa credit cards through Plastic are susceptible to one of two circumstances:

A) Getting categorized as cash advances. In the words of Plastiq, “card cannot be used to make payments through Plastiq as such transactions will be treated as a cash advance, and incur all cash advance-related fees & receive no card rewards.”

B) Getting declined if the payment is around 20% of your credit limit or higher: in the words of Plastiq, “Payments made through Plastiq may be subject to a lower cash advance limit (typically ~20% of your total card limit). Your transaction will otherwise be treated with full rewards, and not incur any additional fees.”

There is a table here that details which of the above two problems a variety of Visa credit cards are having. In summation, personal Visa cards issued by Bank of America and Citi are being treated as cash advances, and personal Visa cards issued by Chase are being limited to payments around 20% of the card’s credit limit. And none of the following types of cards/payments are affected:

  • Personal Visa credit card payments to business in Canada
  • Personal Visa credit cards from: Capital One, Navy Federal Credit Union, USAA, or Wells Fargo
  • Visa business, corporate, debit, and prepaid cards
  • American Express, MasterCard, Discover & JCB cards

While not associated with the current (hopefully temporary) personal Visa card issues, remember that you cannot pay mortgage payments with Visa cards on Plastiq. With other cards you may, but Visa does not allow it on their cards. 

What this Means for You

Hopefully this isn’t a long-term issue. Plastiq says they are working with Visa to find a resolution. In the meantime, if you try to make a payment that’s going to be treated as a cash advance, you’ll be warned of the fees in time to cancel before submission. And Plastiq will cancel any regularly scheduled payments (with notice) that may fall victim to these issues.

Anyone who may be planning on using Plastiq to help meet a minimum spend on one of the affected personal Visa cards should craft a different plan if it falls in category A outlined above (basically Visa cards issued by Bank of America and Citi). If the card you plan on applying for is a personal Chase Visa, make sure the bills you’re going to be paying with Plastiq aren’t greater than ~20% of your credit limit.

Typically meeting minimum spends for bonuses is the only time using Plastiq to pay bills is worth it as the 2.5% fee otherwise eats away at your return (but obviously the return on spend for a sign up bonus is MUCH higher than 2.5%).

Chase Ink Business for 3x Ultimate Rewards is Safe

There is one other circumstance aside from meeting minimum spending requirements when paying bills with Plastiq is worth it, and thankfully it’s not affected by the current situation. You can continue to earn 3 Ultimate Rewards per dollar spent via Plastiq on your Ink Business Preferred as it is a Visa business and not personal card. Bill payments processed through Plastiq on the Ink Business Preferred have been coding for the 3x category bonus for a while now.

I value Ultimate Rewards around 2 cents each (when transferred to airline and hotel programs). A 6% return (3 x .02) far exceeds Plastiq’s 2.5% processing fee, so paying anything you can on Plastiq with your Ink Business Preferred is definitely worth it. Even if you redeemed your Ink Business Preferred Ultimate Rewards through the Chase portal for 1.25 cents each (on cash flights), the 3.75% return is higher than the 2.5% fee (3 x .0125).

Further Incentive for Business Users

I learned recently that for business payments, the Plastiq fee can be written off in part or in full.

Plastiq’s Referral Program

If you don’t have a Plastiq account yet, get one. Their referral program can save you tons on payment processing fees. Everyone that signs up on for an account on plastiq.com is given a referral link they can share with anyone new who is signing up. You and the person both receive benefits–you get $1,000 Fee Free Dollars and they get $500 Fee Free Dollars once your referral makes $500 worth of payments through Plastiq.

FFDs are “Fee Free Dollars”–basically amounts of payments you can make without the card processing fee. You have 90 days to use the FFDs after you earn them.

If you decide to sign up for Plastiq after reading this article, please consider using my referral link. You’ll earn $500 Fee Free Dollars once you make $500 worth of payments through Plastiq. Once you have your own account going, share your distinct referral link with family and friends and start raking in those Fee Free Dollars yourself!

Bottom Line

Be careful processing payments with personal Visa cards on Plastiq for the time being. Many personal Visas payments (excluding those made on Capital One, Navy Federal Credit Union, USAA, or Wells Fargo Visas) are categorizing as cash advances or are being declined as for being greater than ~20% of your credit limit.

At least you can still continue to earn 3x with your Ink Business Preferred card as business Visas aren’t affected.

Have you guys run into problems using Plastiq this month?


Editorial Disclaimer: The editorial content is not provided or commissioned by the credit card issuers. Opinions expressed here are author’s alone, not those of the credit card issuers, and have not been reviewed, approved or otherwise endorsed by the credit card issuers.

The comments section below is not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved, or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all questions are answered.

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1 COMMENT

  1. If i make a transaction of $2500 with my $500 FFD sign up bonus will they charge me 2.5% on $2000 or full $2500?

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