Editor’s Note: In “Deal or Not a Deal” we discuss whether specific point earning opportunities are worth exploring.

Wonky online bill pay provider Plastiq is back with another [targeted] promotion.  Today we’ll discuss how to best make use of this promotion.

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Terms (emphasis ours)

  • Please note that this promotion has limited availability. Eligible customers for this promotion have been notified through email.
  • Must be on a Mastercard credit card (excludes pre-paid and debit cards)
  • Must be created on or after Thursday, October 11, 2018
  • Must be set to process on or before Wednesday, October 31, 2018
  • Must pay a fee of at least 2.5% of amount on that payment (ex., no FFDs can be applied)
  • Your account will be credited with the fee-free dollars on November 1, 2018.

Related Reading

Deal, or Not a Deal?

Robert: When I first heard about this promotion I thought it was huge. But on closer look I think it’s just “pretty good”.

The key thing that changed my opinion was the bit about excluding pre-paid and debit cards. There are a lot of good promos running on Mastercard Gift Cards at grocery stores lately, and a lot of credit cards handsomely reward grocery spend.

Since this promo excludes “pre-paid and debit cards” it’s ambiguous whether Mastercard gift card payments will earn the fee-free dollars. And you wouldn’t find out until November 1st whether those payments earned fee-free dollars. So before we get started it’s good to know whether this promo applies only to credit cards -or- whether gift cards might be eligible if they run as a credit card, perhaps if linked through Masterpass.

Sam, you reached out to your contact at Plastiq. What did they say about this?

Sam: After some confusion and general Plastiq incompetence, I finally got an answer which is as follows:

“Only regular Mastercards are eligible for this promotion, so any Mastercard gift cards would not earn the promotional FFDs.

If you are looking to check the balance of FFDs during the Mastercard promotion, they will not be awarded until November 1, 2018, and will not be displayed until that date, with your regular balance.”

Now, knowing Plastiq as I do (their incompetence is sometimes staggering), I believe they are going to try to exclude prepaid cards. The question I’m then asking myself is… can they actually do it?  They certainly have structured the FFD in a way that we can’t check as we go. That’s not necessarily a bad sign–they don’t want to award FFD prior to November, and they’ve never had a way to generate ‘on the fly’ FFD tallys.

I’m a betting man so I’d say that someone, somewhere will have success with MCGC earning FFD.  Will that person be me? Nope.

How about you Robert? Any interest in using MCGC and rolling the dice?  Some of those gas point offers near you seem lucrative enough to break even or better even if you have to eat the entire 2.5%.

Robert: No, I’m not going to chance it. If they want us to use credit cards I’ll use credit cards. It says a lot when liquidating a MCGC is more appealing than using a credit card, but here we are.

The way I’m looking at this, I’ll break even on credit card rewards at 1.25% in exchange for 1.25% liquidation of MCGCs once the promotion is over.

Part of the problem is how surprisingly rare it is to find a Mastercard which highly rewards spend. I had a look through my wallet desk drawer and here’s what I found:

  • Virgin Atlantic MC (1.5x with additional bonuses that can push it up to 2.1x)
  • Citi Prestige/Premier/Preferred (all earn 1x on Plastiq, but it’s a good time to check for retention bonuses)
  • Citi AT&T Access More (only earns 1x on Plastiq)
  • Citi AA cards (only 1x)

The Virgin Atlantic card looks like the standout to me (for new signups -or- ongoing spend) if you can find good uses for their miles. And I think I can between domestic and international Delta flights. I hear a lot of people get good leverage out of these on flights on ANA premium cabins to Asia.

So that’s how I’d play the first half of this promo: Spend on the Virgin Atlantic card and maybe some spend on Citi ThankYou Point cards if I can shake loose some retention bonuses. I tried on the Prestige: No go. Cancelled. I tried on the Premier and got a meager retention offer that was barely compelling enough for me to keep it.

How about you? Are you in on this one at all?

Sam:  Me? No, not unless something changes for me or our discussion opens a new avenue I hadn’t thought of. I don’t have a Mastercard that needs to hit minimum spend right now. I just finished the minimum spend on a Citi Premier with MCGC coincidentally.

My pile of MC Credit Cards MCCC are even sadder than yours.  I have a Citi Double Cash which might go a little hungry this month–but at 1.25 the spread (.75%) for me is just too thin to get into it.  Had they allowed MCGC I still think I’d have passed.

But one thing to know about this game is that we should never say never–so I think today’s post is a good idea to consider for everyone–whether you’re like me and think this is not a deal, or like Robert and consider it a deal.

I wanted to get into a very specific case where this ‘not a deal’ could turn into a really interesting deal–

Let’s take my above Citi Premier card for example.  I earned 60,000 TYP on that minimum spend.  Now what to do with those 60,000 TYP? What if I know I’m going to use those for future Virgin Atlantic flights? Well I could transfer with a 1:1.3 transfer rate right now (30% bonus). But what about the following instead:

  • Cash out the 60,000 TYP for $600.
  • $600 covers the fees on $48,000 in charges (at 1.25%, half will need to occur next month).
  • $48,000 spent on a Virgin Atlantic card would earn 72,000 base miles (1.5 per $1) plus a 15,000 mile bonus for a total of 87,000 Virgin Atlantic miles.
  • That’s a 1:1.45 transfer ratio for TYP:VS.
  • I debated titling this post, “AMAZING OPPORTUNITY FOR 45% BONUS ON TYP-VS TRANSFERS. ACT NOW.” (/s)

So, if (and it is a big if) I found myself flush with these new TYP and looking to book a Virgin Atlantic award booking I could transfer those TYP using the standard 1:1.3 Citi TYP portal. OR I could leverage that $600 into as many as 87,000 Virgin Atlantic Miles with Plastiq.

Is that something everyone should do? No, in fact I think it is something pretty much no one should do. Buying VS miles for 0.68¢ per is not a terrible way to earn them should you have a need. But the lag time (2 months), the loss of hard cash, and the possibility of malfunction with $48,000 in Plastiq payments out there make it really just a fun academic mind exercise.

What about you Robert: Any interest in cashing out a bunch of UR/TYP to cover your VS miles? And if so, what targets are you eyeing?

Robert: Wow. I like your creativity there. It pushes me [and hopefully others] to think about what I’m doing here. It’s easy for me to say “I’m break even or better on the first half of the transaction to open up a low-fee online liquidation channel”. But I should really look closely at the numbers.

If I ran $10,000 through at 2.5% that’s a cost of $250. I’d have ~21,000 Virgin Atlantic miles and I’d earn $10,000 FFDs. Or maybe $10,250 depending on how they count it.

$250 divided by 21,000 miles is 1.1 cents per mile.

Would I buy Virgin Atlantic miles for 1.1 cents per mile? No, I wouldn’t. But what’s the value of $10,000 FFDs?

If I could liquidate $10,000 worth of MCGCs purchased at a grocery store that could open up some lucrative bonused spend. 4x MRs on the Amex Gold card for example. If MRs are worth 1.5 cpp to me, and the card activation is 1% that’s a 5% spread. Or $500 in value.

For paying $10,000 worth of bills, I’d spend $250 in Plastiq fees + $119 in MCGC activation fees. I’d get 21,000 Virgin Atlantic miles + 40,000 MRs.

If we value the Virgin Atlantic miles at a penny a piece and the MRs at 1.5 cpp that’s $810 of value for $369 in costs for a profit of $441 per $10,000.

Is that worth the effort? Well, there isn’t nearly as much clicking involved this go-round. You can make larger payments on the first half of the promo. And grocery stores have $5,000 limits per visit around me. And Masterpass isn’t involved, so that cuts out another step.

Is there some risk? Absolutely. Plastiq could bungle things, banks might shut me down for running up spend at grocery stores, and payees might not like all these payments coming in. And that’s just off the top of my head.

But $441 per $10,000 is a pretty good spread for two visits to the grocery store and no visits to WalMart. Especially when WalMarts around me unreliable for VGC liquidation.

Liquidation is everything in this game so that’s why I think this is a good deal. Because of the liquidation channel it opens up.

I’d put the NPV on this one at around $500 realistically:

  • Spread: Pretty good at around 4%
  • Scale: Good, but the duration is short
  • Time: Not that much time required relative to in-person liqudiation
  • P(Malfunction): Moderate

Have I convinced you to tinker with this one, Sam? Maybe not if you have better liquidation channels available.

Sam: I do have better liquidation channels available–but you know what–you have convinced me there is value in using this Plastiq deal for an online liquidation backstop.  Who knows when a liquidation channel like WM will go from hot to cold.  This kind of backup liquidation is a good idea for anyone to have access to, myself included.  And you’re right–liquidation is everything.

As I started out this post saying–I have a Citi Double Cash that won’t see complete use this month, so why not throw that out there for a $10k payment this month. That lets me get ‘unstuck’ from 20x$500 cards next month in case I do have some kind of situation where I struggle to liquidate them.

Worst case I do the second half of the $10k on the DC next month as well, and just count it as a wash with a slight $150 profit.

To further leverage this–I could use the cash flow from the $10k to fund a new bonus savings account. I had been on the fence about. The Discover $200/$25k Savings offer–I would have had needed to break e CD to make it work, or push lots of smaller float into the account. This makes it so I don’t have to break the CD. I wouldn’t say this earns me the full $200 bonus, because I could have floated MO money into the savings account and then pulled back and paid the bills. But still the float and the liquidation have some value for me.

And maybe this keeps the lights on at Plastiq for a few more months.

Conclusion

Sam: I really didn’t come into this post thinking I’d find a use for this promo. I thoight this was a firm ‘no deal.’ The numbers seemed all wrong to me. But Robert outlined a way for those with limited liqudation to leverage this into a nice haul–and we even talked about an ‘AMAZING 45% TRANSFER BONUS!!!!!!!’ (sorry, couldn’t resist).

At the end of the day the importance of talking things out–and seeing them from a different angle is important. If you’d like to discuss these types of strategies with you can always leave a comment here, or tweet myself, or Robert.

What’s your take on the promo? Worthwhile? Worthless? Somewhere in between?

– Written by Robert Dwyer, contributor at Milenomics. Connect with me on Twitter @RobertDwyer

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9 thoughts on “Deal or Not a Deal? Plastiq’s Targeted October 2018 Mastercard Fee-Free Dollar Promotion

  1. For those who have a Plastiq payee setup that allows for unlimited payments (such as in the comments you referenced), I would look at it like this:

    1. This month: Use Citi Double Cash
    2. After this month: Use FFDs to liquidate gift cards or to meet min spend, whatever

    Step 1 costs just under half a percent once you get rewards back, but lets call it an even 0.5% cost.
    Step 2 costs nothing.
    So, overall, this is a way to create an online liquidation of any gift cards or credit cards (that Plastiq will accept for your type of cc — for example, Amex & Visa can’t be used for mortgages) for 0.45%. I’d take that all day long.

    Let’s run some big numbers: Suppose you’d like to free up $1 million dollars of ms, then:

    1. Run $1M through Citi Double Cash this month. Pay $25K in fees. Get back $20,500. Net cost: $4.5K
    2. Starting Nov 1 through whenever, liquidate gift cards for free, up to $1M
    Total cost for $1M worth of ms: $4.5k / $1M = 0.45% = $2.25 per $500

    Yes, you can do much better than $2.25 per $500 via money orders or in-store bill pay, but this seems like a great way to drastically increase ms capacity in a way that can be done entirely at home.

    Even if you then just run the Double Cash through again for another $1M, you would get $20K in rewards for a net profit of $15,500

    The downside is that doing so much spend would likely get eyes on your account and your liquidation channel (and maybe even your Citi card) would get shut down. So, I don’t really recommend this at huge numbers, but it helps to see how good this promo is.

  2. I think the promo looks better once you realize the second half of it isnt limited to an MC, but any card that Plastiq will accept. A lot more opportunities open up when you arent limited to the crappy selection of MCs in your wallet. Like Robert said it’s especially appealing for us with more limited liquidation methods.

  3. I thought this deal was just okay until I read this post. Thanks! I’m about to leave for a trip so I hope Plastiq doesn’t change it before I get back next weekend.

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