Pay Any Bill with a Credit Card (To Increase Your Credit Card Spending) (2021)

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  Collecting Credit Card Signup BonusesTips to Easily Meet the Initial Spending Requirements of New Credit Cards

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A variety of services let you pay bills using a credit card, even when credit cards aren't normally accepted. All these services charge “convenience fees” to cover the cost of the credit card processing fee and earn themselves a small profit. But depending upon your circumstances, it can easily be worth paying fees in order to shift more of your spending to your credit cards.


Reasons to pay your bills with your credit card

There are several reasons why it might make sense to pay a fee to use your credit card to pay bills which would otherwise need to be paid with a check or money transfer.

  1. Finish meeting the initial spending requirement of a new credit card. If you find yourself coming up short, you can pay a bill from someone who doesn’t normally take credit cards. Examples might be your rent or mortgage, car payment, daycare, etc. Chances are that you have enough expenses to finish meeting your initial spending requirement.
  2. If the alternative is not qualifying for the signup bonus, paying fees is usually worthwhile. For example, if you are $500 away from meeting the spending requirement, paying a 3% fee works out to $15 in convenience charges. This is much smaller than the value of most signup bonuses.

  3. Increase the number of signup bonuses that you can collect each year. By shifting most of your expenses, including your rent or mortgage, to your credit cards, you can dramatically increase the total amount you spend on your credit cards each year and therefore the number of signup bonuses you can qualify for. If you are really going to focus your energies on collecting signup bonuses, this can be worthwhile. With a 3% fee, it would cost $90 to pay enough of your bills to meet a typical $3,000 spending requirement.
  4. However, if you pay fees to collect additional signup bonuses now, and then wind up just earning regular rewards for your normal credit card spending later, it isn't worth it. It would be better to simply spread out your credit card signups over time and avoid paying extra fees.

  5. Qualify for a special credit card benefit that requires a certain amount of spending. Shifting more of your expenses to your credit cards can help you meet spending requirements that unlock special credit card benefits. For example, if you spend $15,000 on the Hyatt card, you'll get an extra free night certificate. This can be hard to do naturally. However, if you are willing to pay a 3% fee, you might be able to shift $15,000 of expenses (that you could not normally pay with a credit card) to your Hyatt card. In the process, you’d be earning an additional 15,000 Hyatt points from the actual spending. If the 15,000 Hyatt points and the free night certificate are worth $450 to you, this would be worthwhile.
  6. Earn extra rewards. Some points and miles gamers take this a step further. If it is possible to earn more value in rewards than you’d pay in fees, you are “making” a bit of money on every purchase. For example, if you have a 3% cashback card and you pay 2% in fees to pay your taxes, you are essentially getting a 1% rebate.

Paying Businesses with Plastiq

Plastiq lets you pay any business. You can use it to pay many different types of bills that you ordinarily couldn't pay with a credit card, like rent, mortgage payments, daycare costs, or housecleaning services.

  • Plastiq is the most flexible bill paying service. It lets you pay almost any bill with a credit card (at least with a Mastercard). If the company isn’t already in their database, they will simply mail them a check or send them an ACH transfer. You can also use it to pay individuals, such as babysitters, as long as you are paying for an actual item or service, and not just sending them money as a gift. One of the only other restrictions is that you can’t use it to send money to financial accounts, including paying off your credit card bills.
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  • Mortgage payments can only be made with Mastercards and Discover cards. Rent (and HOA fees) can be paid with all cards.
  • You can only use Amex credit cards for a limited set of payments. The only acceptable payments are for "Government, Utilities, Education (not including student loans), Residential Rent, and Club Fees & Memberships".
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  • There are a confusing set of limitations for Visa cards.
    • Despite what the chart says, the only categories where you can safely use every Visa card are rent (and HOA fees), taxes (and government fees), utilities, and tuition (including daycare and camps).
    • With most other Visas, if you try to pay one of the other categories shown in the chart, such as insurance, it will process as a cash advance. Plastiq will pop-up a warning, but if you continue, you'll wind up paying extra fees and won't receive any credit card rewards.
    • However, with personal Visas from Chase, as long as the payment is less than 20% of your total line of credit, any cash advance charges will be reversed and you will still earn your rewards.
    • Visa business cards, debit cards, and Wells Fargo credit cards can be used for all the Visa categories on the chart, without any issues.
    • There is a way to get around the Visa limits and pay any category where a Mastercard could be used. PayPal has a service called PayPal Key that gives you a "virtual" Mastercard number that you can temporarily link to any other Visa or Mastercard. If you link a Visa card to your PayPal Key and then use your key on Plastiq, you can pay merchants that you otherwise couldn't pay with a Visa.
  • Service fees are typically 2.85%, but they often have promotions, which can reduce the cost with certain types of cards.
  • You can earn bonus rewards with some Bank of America cards. Some rent and HOA payments made through Plastiq code as "Travel" with Bank of America (but not with other credit cards). If yours does, you can earn bonus points with the Premium Rewards, Cash Rewards, or Business Cash Rewards card.
  • You can't use use Plastiq with gift cards.
Plastiq and Tax Payment Fees are Business Expenses

If you are using Plastiq to pay business expenses or using one of the tax paying services to pay your business taxes, any fees are deductible. The credit card rewards you'd earn are not taxable. So for business expenses, you are getting a discount on the effective cost of earning points and benefits through these services.

Paying Taxes

  • You can pay your federal taxes with a credit card, and depending on your state and county, you can also pay your state taxes and property taxes. Convenience fees are around 2%. When this was written, the lowest fee for federal taxes was 1.96%. These fees are cheaper than Plastiq. IRS Credit Card Payment webpage.
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  • Any excess payments will be refunded, so you can use these services to generate any amount of spending. As long as you are willing to pay the fees, you could pay the IRS more than you owe them. Then when you file your taxes, you'll receive a refund. This can be handy if you need meet a very high spending requirement.
  • Of course, you won't be able to get your money back until some number of weeks after you file your taxes. You'll need to be able to "float" the money for a lengthy period of time and you need to factor in the opportunity cost of not being able to invest the money in the meantime. So this obviously works best the closer it gets to the date when you would file.

  • Another alternative is to use your credit card to purchase (pin-enabled) Visa or Mastercard gift cards, and then use the gift cards to pay your taxes. The fees the tax payment companies will charge for using a debit card are very low, but there are typically additional fees to activate the gift cards. The only limitation is that you are limited to two payments with each tax paying service for each tax payment time-period. Since gift cards usually have a $500 maximum, this limits the total amount of taxes that you can pay with this method.
  • You can make two estimated tax payments per provider each "quarter", plus two "automatic extension" payments per provider per year (even if you don't need the extension, plus an additional two final payments per provider. If you try to use the service for the non-primary filer on a joint return, there is some chance that they won't be applied to your taxes automatically and you may need to work with the IRS to properly attach them to your tax account.

  • You can take advantage of any PayPal-related promotion by paying your taxes with PayUSATax. Occasionally, some credit cards will offer bonus rewards for PayPal purchases and paying your taxes is a great way to multiply the benefits of this type of promotion.

Pay off your student loans or save for college

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If you have student loans, you can purchase “Gift of College” gift cards and then use those cards to pay off your loans. Before you do, you need to go to their website, register for an account and see if your student loan company is listed. The same cards can be used to add funds to any 529 account to put aside money for your kids’ education.

This can be a cheaper than paying them with Plastiq. The fee for a $500 gift card is only around 1.2%, but they aren't available in many stores. If you need to purchase online, you can only get cards up to $200 each with a fee of about 3%.

Other payment services

Melio is a payment service that works similarly to Plastiq but has several additional limitations. The fee is slightly higher (2.9%). is meant to be used by small businesses (and they tend to verify), and is not supposed to be used for payments that are "personal in nature". The main reason to use it instead of Plastiq would be to take advantage of any attractive Melio promotions.




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