Whenever a juicy signup bonus is available on a credit card, it usually comes paired with a hefty minimum spending requirement. Depending on your personal finances, meeting it to unlock the welcome bonus can either be a breeze or possibly a significant hurdle.
As you grow from a Miles & Points beginner to a more advanced participant, one of the most important lessons you learn is that minimum spending requirements should never hold you back. There are always more creative ways to tailor your spending habits to help reach your goals.
One of the best ways to access some of the higher signup bonuses out there that may appear intimidating at first is by using bill-paying services to pay for things that normally don’t accept credit cards, such as rent, taxes, or even tuition. Not only will you earn a solid chunk of rewards points, but you’ll also make a nice dent in your spending requirement.
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), as well as helping to meet spending requirements that’ll land you a huge signup bonus (which you’ll definitely value more than the convenience fee you pay).
For example, let’s say you’re shooting for the signup bonus on the American Express Business Gold Card, which is a currently offering an impressive 75,000 Membership Rewards points – but only after you spend $5,000 in the first three months.
If you pay a $5,000 tax bill via PaySimply at a 2.5% fee, that’ll cost you an incremental $125, which is a small price to pay when 75,000 MR points are on the line.
|Credit Card||Best Offer||Value|
100,000 MR points
$499 annual fee
|100,000 MR points||$1,976||Apply Now|
Up to 90,000 Aeroplan points
$599 annual fee
|Up to 90,000 Aeroplan points||$1,921||Apply Now|
90,000 MR points
$699 annual fee
|90,000 MR points||$1,646||Apply Now|
75,000 MR points
$199 annual fee
|75,000 MR points||$1,561||Apply Now|
90,000 Aeroplan points
$599 annual fee
|90,000 Aeroplan points||$1,449||Apply Now|
Up to 77,000 MR points
$99 annual fee
|Up to 77,000 MR points||$1,419||Apply Now|
30,000 MR points
$156 annual fee
|30,000 MR points||$564||Apply Now|
2,000 Air Miles
$180 annual fee
|2,000 Air Miles||$88||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.
Let’s take a more in-depth look at some of the best bill payment services available to Canadians, starting with the biggest player in the space.
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 to a recipient in Canada.
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 through Plastiq. If you’re looking 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 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
Plastiq has recently ended its relationship with American Express, and you’re no longer able to make payments through Plastiq with an American Express card. If you have one stored in your account, it will be removed, and any scheduled payments will also be cancelled.
This leaves you with the option to pay with a Visa or Mastercard product, which will incur a fee of 2.9%.
You can also use prepaid cards to make payments through Plastiq, which also incur a fee of 2.9%. Note that you’re limited to $10,000 per month with prepaid cards, which should only affect you if you are a heavy user of the service.
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 completed $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 with American Express
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
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?
Credit card signup bonuses are the best way to earn a large amount of points in a short period, and it’s often the case that the most attractive bonuses are tied to the highest spending requirements.
Fortunately, with the ability to pay bills with Plastiq and PaySimply, you’ll be able to knock out a good chunk of the spending while also earning points on your bill payments. By doing so, you won’t be letting these seemingly onerous thresholds hold you back from racking up the points.
Out of the two, PaySimply is the leading player and gives you access to the widest range of payment types with a lower fee of 2.5%. Plastiq is a close challenger, offering a higher 2.9% fee on a wider set of payees, although you can no longer earn valuable American Express Membership Rewards points through the service.
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.
Plastiq has a friendly interface and lets you schedule your payment which I used to do to pay CRA. Since they no longer support CRA, I started using PaySimply and set reminders to pay on a specific day…a bit of a pain, but get to save 0.4%.
Hey Ricky! You mentioned:
"You can also pay your cellphone bill, brokerage account, and even credit card bills through Paytm – but those can only be done via bank transfer or Paytm Cash"
For cell phone bills … payment via bank transfer or Paytm cash only vs Credit Card … Is this new?
I was admittedly in a bit of a hurry when publishing this post and missed some info there. I meant to make a distinction between bills that otherwise accept credit cards anyway (cell phone / internet) and bills that can be paid via Paytm but not with credit cards (brokerage / debt products / credit cards). Thanks for pointing it out.
Hi Ricky: thanks for your really helpful articles! the links for plastiq doesn’t work though.
Oops! Thanks for catching that. Fixed that now.