When it comes to maximizing your earning potential, you’ll want to put as many expenses as possible on your credit cards to earn points, and then pay them off to avoid incurring any interest fees.
In some cases, you may be working towards meeting a minimum spending requirement to unlock a nice welcome bonus, while in others, you might just be looking to pad your points balance on every transaction you make.
As you’re searching for new ways to leverage credit card rewards, you’ll want to familiarize yourself with using bill-paying services to pay for things that normally don’t accept credit cards, such as taxes, rent, or even tuition.
How Do Bill Payment Services Work?
Whenever you purchase something with your credit card, the credit card company charges a fee to the merchant. In the retail world, merchants end up adjusting their prices to pass on the bulk of these fees to the consumer, and are therefore happy with the arrangement; after all, accepting credit cards also brings in more customers thanks to the convenience factor.
However, bill collectors – such as the CRA, municipal governments, landlords, utility companies, and universities – tend to be unwilling to accept credit cards and deal with the associated merchant fees.
That’s because they know that you have to pay these bills anyway, so they’d much prefer to receive your money via cheaper avenues like cash or debit.
These organizations would find credit card fees especially costly, since the fees are charged as a percentage of the total transaction, and things like tax payments can easily add up to significant dollar amounts.
Bill payment services exist to fill this gap. They act as an intermediary between you, the bill payer who wants to use a credit card to pay a bill, and the biller, who wants to receive their money in a frictionless manner.
The bill-paying service gets hit by merchant fees when doing so, and so offsets this loss by charging you an added convenience fee that makes it worthwhile for them to provide the service.
By using a bill-paying service, you get to pay your large bills with a rewards-earning credit card, earning points on these transactions which you might value more than the convenience fee you pay.
Plus, bill payment services can help when it comes to meeting minimum spending requirements that’ll land you a huge signup bonus (which you’ll definitely value more than the convenience fee you pay).
For example, the welcome bonus on the American Express Business Gold Card (and other top-tier products) typically requires you to spend $5,000 or more in the first three months. Upon doing so, you can earn a welcome bonus, which might be for 75,000 Membership Rewards points or more.
If you were to pay a $5,000 tax bill via one of the bill payment services, such as PaySimply, with a 2.5% fee, that’ll cost you an incremental $125. However, this is a small price to pay when, say, 75,000 points are on the line.
American Express Credit Cards with $5,000+ Minimum Spending Requirements
| Credit Card | Best Offer | Value | |
|---|---|---|---|
|
120,000 MR points $799 annual fee |
120,000 MR points | $1,574 |
Apply Now |
|
75,000 MR points $199 annual fee |
75,000 MR points | $1,561 |
Apply Now |
|
Up to 77,000 MR points $99 annual fee |
Up to 77,000 MR points | $1,419 |
Apply Now |
|
100,000 MR points $799 annual fee |
100,000 MR points | $1,361 |
Apply Now |
|
Up to 100,000 Aeroplan points $599 annual fee |
Up to 100,000 Aeroplan points | $819 |
Apply Now |
|
90,000 Aeroplan points $599 annual fee |
90,000 Aeroplan points | $611 |
Apply Now |
|
15,000 MR points $156 annual fee |
15,000 MR points | $372 |
Apply Now |
Of course, you should aim to complete as much of the minimum spending requirement through your daily organic spending as possible, but using bill-paying services to knock out the excess is always a good option to have at your disposal.
As an added benefit, you also get to take advantage of the interest-free grace period on your credit card (typically 21 days), giving you more streamlined access to your money compared to paying the biller immediately via bank transfer or debit.
Plastiq: Intuitive Bill Payments with Visa and Mastercard
Plastiq – available on both mobile and desktop – allows you to pay your bills using Visa and Mastercard, charging no more than 2.9% for every transaction made to a recipient in Canada.
It’s worth noting that Plastiq started accepting American Express cards again in October 2023; however, American Express products cannot be used to pay any vendors in Canada at this time.
Making Bill Payments with Plastiq
Plastiq works with most major billers across Canada to send them your bill payments via electronic bank transfer, so that your bills can be delivered seamlessly within five business days.
The process is quite simple: you log in to your account, search for the biller you’d like to pay, enter the payment details (amount, account number, memo, etc.), and then finalize the payment using your desired credit card.
One of the previously most popular uses of Plastiq, the Canada Revenue Agency, is no longer an eligible payee for direct payments through Plastiq. However, Plastiq supports CRA payments sent via cheque in the mail, and the details for that can be found on the Plastiq website.
If you’re looking for a more seamless way to pay your taxes with a credit card, you’ll have to look to PaySimply, which we’ll cover in detail below.
Adding Custom Billers
What’s more, Plastiq also lets you add your own billers. For example, for rent payments, Plastiq has many property management companies in their database to whom you can pay rent; however, you’re also able to pay your own landlord by manually entering their contact details.
When you complete a payment, Plastiq will send a cheque to the custom payee’s address; in most cases, this takes about two weeks to process, so you’ll want to initiate the payment well before the bill is due.
The ability to add custom billers may also be useful for business owners who need to regularly make payments to suppliers or contractors who don’t accept credit cards as payment – Plastiq will accept your credit card payment and send a cheque to the supplier on your behalf.
By using Plastiq, business owners will also benefit from greater liquidity through the interest-free grace period on their credit cards compared to paying the bill via cheque or e-transfer.
Eligible Payment Types
For vendors located in Canada, you have the option to pay with a Visa or Mastercard product, which will incur a fee of 2.9%.
If you’re paying a vendor in the United States, you can make a payment with an American Express product, which will also incur a fee of 2.9%.
Fee-Free Dollars
With Plastiq, you can also earn “fee-free dollars” (FFDs), which is how Plastiq rewards its users for referring other businesses to the service. A certain amount of FFDs allows you to pay that amount to a biller for free, without being charged the 2.9% transaction fee.
Plastiq’s referral program works as follows: every time you refer a business to Plastiq, you get 2,500 FFDs after they make payments totalling $2,500 (USD) or more. The new member also earns 2,500 FFDs upon reaching the same payment threshold.
Referrals can be a great way to save on Plastiq’s fees. If you referred two businesses who each complete $2,500 (USD) in payments, then you’d have earned 5,000 FFDs, allowing you to make $5,000 in bill payments without paying any transaction fees.
Put another way, you’ll save $145 on a $5,000 payment by putting 5,000 FFDs against your payment.
PaySimply: Pay Select Bills for a Lower 2.5% Fee
Besides Plastiq, one of the more prominent services that has popped up in recent years is known as PaySimply, which allows Canadians to pay bills to the CRA, municipalities, colleges and universities, and utility companies using their credit cards at a 2.5% fee.
The list of eligible billers is more restrictive than Plastiq’s, and there isn’t the ability to add your own custom billers just yet.
Instead of creating an individual account and logging in, all payments are handled directly on the PaySimply website or mobile app. Simply choose your biller, enter the details of your payment, and then proceed to complete the transaction.
Direct payments with Visa, Mastercard, or American Express are subject to a 2.5% fee. PayPal payments were previously lower at 2.29%, but this has since been updated to match the 2.5% fee for direct credit card payments too.
With a lower transaction fee (2.5% vs. 2.9%), PaySimply is therefore a better choice than Plastiq if any of the following conditions are met:
- You want to pay a Canadian vendor with American Express
- You want to send an electronic payment the Canada Revenue Agency instead of a cheque in the mail
- Your biller is supported by PaySimply
- You don’t have enough Plastiq FFDs to help reduce the 2.9% transaction fees on a Visa or Mastercard payment
Chexy: Pay Rent with a Credit Card
In 2023, Chexy launched to provide Canadians with a seamless platform for paying rent with a credit card. As long as your landlord accepts Interac e-transfers, you can pay them via Chexy.
If you’re signing up for Chexy, consider doing so through the Prince of Travel referral link, which helps to support the website.
Click here to sign up for Chexy.
The process of setting up rent payments is easy, and just requires you to verify some information before sending out your first payment
Chexy charges a nominal 1.75% fee for credit card transactions, which is less than what you’d pay with a custom payment on Plastiq. Chexy also supports foreign credit cards, although the processing fee increases to 2.5% when paying with a card issued outside of Canada.
Fortunately, you can pay with a Visa, Mastercard, or American Express product, which gives you the option to earn travel rewards or cash back on your rent payments each month.
If you’re looking to earn cash back instead of travel rewards, you’ll be happy to know that your rent payment made through Chexy codes as a recurring bill payment.
Scotiabank Momentum Visa Infinite Card
Welcome Bonus
10% cash back
Annual Fee
First Year Free
First-Year Value
$200
This means that you could use a card that earns elevated rewards for recurring bill payments, such as the Scotiabank Momentum Visa Infinite Card, which earns a 4% cash back on monthly recurring payments.
After accounting for Chexy’s 1.75% fee, you’d earn a net return of 2.25% cash back on your monthly rent payments.
Therefore, if you pay $2,000 in rent each month, you’d pay a total of $2,035 (including Chexy’s fee), while still earning $81.40 in cash back on the Scotiabank Momentum Visa Infinite Card. That adds up to $976 earned over the course of the year!
Canadian Tire Financial Services
While it’s not necessarily a bill payment service like Plastiq or PaySimply, we need to give an honourable shout-out to Canadian Tire Financial Services for the ability to pay a host of bills using a Canadian Tire credit card.
For example, if you have one of the Canadian Tire Triangle credit cards or the Canadian Tire Options Mastercard, you can earn rewards by paying off bills, such as property taxes, tuition, or hydro bills, using your credit card.
While the list of payees may not be as exhaustive as Plastiq, and the CRA is noticeably absent from the list, you can still find a surprising number of organizations that you can pay from your account.
You’ll be able to find many educational institutions, municipalities, and even insurance companies listed on the service.
The best part is that the payment doesn’t code as a cash advance, so you won’t be charged a ludicrous amount of interest. Rather, it appears to your payee as a payment from a regular bank account instead of from a credit card.
If you were going to make a hefty payment for property taxes or a large bill anyway, why not earn some extra Canadian Tire money that you can use for an in-store purchase at the same time?
Conclusion
Earning credit card rewards on every transaction you make is one of the best ways to boost your points balance, both for the short-term and over the long-term.
Fortunately, with the ability to pay bills with Plastiq, PaySimply, and Chexy, you can pay large expenses, such as taxes and rent, using your credit card while also earning points on your bill payments.
Using bill payment services can be a great way to earn points on services for which you can’t usually use a credit card. Just be sure to determine if the costs of using the services are justified, which usually means a high return of points.
