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Why I Happily Pay Property Taxes (Plus Fee) With a Credit Card

When you start out in this hobby, something you have to be extremely picky about is fees. Those can really add up and make your travel anything but free. An annual fee of $89 here, $5 fee on a Visa gift card there, and before you know it, you’ve spent a cool grand and you didn’t even step a  foot on a plane. I recommend you write those down, so you can have a rough idea of how much your “free” trips really cost you.

That said, while I try to avoid paying fees as much as I can, they are not deal breakers by any means. I just do the math and make sure my return will almost certainly exceed  the investment. Because, that’s what we are doing in this game: We invest our time, energy and  money hoping that the payoff is worth it in the end. I’ve also encouraged readers to view miles and points as stocks, and settle for not so spectacular (according to hobby experts) returns if their savings account isn’t very healthy at the moment (see my post for more on this subject).

I’ve mentioned before that all of our spending goes toward new credit card bonuses. Why?  It’s how I get the best bang for my buck. I’ve calculated that I conservatively get 20 cents on every dollar, and retail value is closer to 40 cents. That’s 20% return which would be tough to beat via manufactured spending or reselling. I’m not saying it would be impossible, but it would almost certainly involve questionable ethics, huge time commitment etc. Not to mention, any MS strategy that yields this sort of return is probably unsustainable in the long run.

BTW my husband gave up on reselling, said it’s too much trouble. Yes! Of course, we still have all those boxes in the garage and bedroom. I told him he has till the end of the year to get rid of them. Or else. Actually, nothing drastic will happen, I just wanted to gave him extra motivation. Limited time offer! Get rid of the boxes now! My patience will run out soon!

Where was I? Basically, I try to throw my energy at the low-hanging fruit. Of course, I maximize promos, Amex offers and look for decent coupons. But at its core, my hacking strategy primarily involves churning (switching credit cards in order to collect sign-up bonuses).

It doesn’t mean that everyone should follow my lead. But it’s what works for my family. Recently, my husband got approved for Barclaycard Arrival Plus (read about it here). In order to get the sign-up bonus, we have to spend $3,000 in 3 months. Our property tax runs at over $1,200 per year and is due in November. I always pay it in-full in order to get a discount. There are two ways to do it: Pay with a check (no fee) or credit card (2.8% fee).

I chose the latter and here is why. While the fee is significant,  Arrival earns 2 points per dollar redeemable for 2.1 cents on travel redemptions when you factor in rebate. Of course, there is that extra 0.7% or a little over $8 in fees that came out of my pocket. True, but it allowed me to get closer to completing my minimum spending and collecting the prize. And it’s all about the prize, folks. As I’ve mentioned earlier, I get around 15%-20% return from churning (haven’t calculated my haul for this year yet). So, the sooner I’m done with Arrival offer, the sooner I can move on to my next credit card.

And that’s why I went ahead and applied for Arrival in my name. I already have two credit cards with Barclays, so wasn’t super confident on my odds of approval. Well, I got it!

arrival approval

On to the next one. And I don’t plan to stop unless  the banks stop me. It’s like I told my one of my readers: when I get denied for few cards in a row, there is my answer.

An update: Check out this comment from reader Erik.

“But but…you could have MADE money by paying your property taxes with Plastiq, under their recent (frequent?) 1.5% fee for Mastercard payments promo and using the Barclay Arrival Plus. In this situation, Plastiq will send a paper check to the payee. You just need to schedule the payment in advance with enough time for it to arrive by the due date (i.e. 10 business days). I just paid off a car this way.

I was going to do it via the old fashioned method, but then I remembered “Hey, I’ve got some significant travel charges on the Barclays that I can redeem for statement credits…and Plastiq is running a 1.5% promo…I can make money on this transaction!” It worked fine.

There was only a minor mistake made by the lender. They made an assumption that Plastiq was buying the car, so they sent the lien release letter to Plastiq, but this was easily rectified by a phone call to the lender’s customer service to have the letter re-sent to my home address. No big deal, Plastiq did their part correctly and within the promised timeframe.” Check the comments section to see my response.

This is a good chance to give a reminder on importance of going beyond just minimum spending requirements. Yesterday I got an email from my reader Leticia and wanted to share an excerpt with you: “In the past I remember signing up my daughter for a class and paying with a card that I was working on meeting minimum spending on and then the class got cancelled.

Fortunately,  I had made a bit more than the spending but it’s a thing to bear in mind. Think about what you’re charging to your card. Is it something you may need to return, a class that can get cancelled, etc.? It’s probably always good to go beyond minimum spending.”

This is an excellent point which I’ve mentioned before, but it’s worth repeating again and again, especially to those just starting out in the miles and points universe. It’s better to be safe rather than sorry when it comes to big sign-up bonuses. I always put an extra few hundred dollars on my new card for that very reason. Also, keep in mind that annual fees do not count towards  minimum spending requirements.

If for some reason you miss out on a bonus due to an oversight or a returned purchase, always contact the issuer and beg them to make a one-time exception. What do you have to lose at that point?

Should you pay fees in order to collect the sign-up bonus?

It honestly depends. If you’ve already signed up for an offer and have  a hard time meeting minimum spending requirements, by all means, take  a look at your bills. It’s certainly better to pay extra $50 so you don’t miss out on $400. It’s only logical, no? However,  if you only get a few new bonuses per year and they happen to have “low barrier to entry,” then you probably don’t need to bother paying extra fees. Take a look at my post that has some ideas on ways you can meet minimum spending requirements

Readers, how often do you pay with a credit card even if there is a fee involved?

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Author: Leana

Leana is the owner and founder of Miles For Family. She enjoys beach vacations and visiting her family in Europe. Originally from Belarus, Leana resides in central Florida with her husband and two children.

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18 thoughts on “Why I Happily Pay Property Taxes (Plus Fee) With a Credit Card

  1. Count me in as someone who pays property tax, home insurance and HOA fees with a credit card! Property taxes are so high where we live that those fees combined are enough for 2 credit card minimum spends.

    • @Shoesinks Yup, I figured you would! We have very similar strategy on earning points. While it’s good to avoid fees whenever possible, as long as return exceeds the investment, it’s definitely something to consider. Plus, I don’t have to go anywhere to buy Visa gift cards, trying to liquidate them or worry about whether everything will work as intended etc. I don’t like too much hassle, and this is an easy way to hit minimum spend.

  2. We mostly pursue sign-up bonuses, too. I don’t know how anyone with kids has time to take part in large-scale MS.

    • @Holly I totally agree! MS makes my head spin, even in small quantities. I don’t know how others can do it on a large scale without going cookoo. Wait a minute, what am I saying? Most in this hobby are cookoo!

      • I am willing to buy a few thousand in gift cards to meet a minimum spending requirement if I absolutely have to. But that’s about it =)

    • @Holly I agree that MS to meet minimum spend is almost always worth it. Collecting points beyond that just seem like a lot to keep up with. Of course, some do it successfully. But I’m too disorganized to pull it off, plus, some of the tricks make me uncomfortable.

  3. But but…you could have MADE money by paying your property taxes with Plastiq, under their recent (frequent?) 1.5% fee for Mastercard payments promo and using the Barclay Arrival Plus. In this situation, Plastiq will send a paper check to the payee. You just need to schedule the payment in advance with enough time for it to arrive by the due date (i.e. 10 business days). I just paid off a car this way. I was going to do it via the old fashioned method, but then I remembered “Hey, I’ve got some significant travel charges on the Barclays that I can redeem for statement credits…and Plastiq is running a 1.5% promo…I can make money on this transaction!” It worked fine. There was only a minor mistake made by the lender. They made an assumption that Plastiq was buying the car, so they sent the lien release letter to Plastiq, but this was easily rectified by a phone call to the lender’s customer service to have the letter re-sent to my home address. No big deal, Plastiq did their part correctly and within the promised timeframe.

    • I should note that Plastiq’s regular (non-promo) fee of 2.5% is still better than your local government’s 2.8% fee…they are ripping you off! Speaking of paying taxes, if you end up having to pay US Federal income tax in April, http://www.payusatax.com only charges 1.87% which you can make money on using a card that pays more than that % in cash or other rewards. PayUSATax is an official payment processor for the IRS so the payment happens immediately.

      • @Erik Darn it, you just had to rain on my parade! 🙂 You know, I looked at this Plastiq promo before and decided not to pursue it. I’m sure it’s nuts, but I’m afraid to involve a middle-man when it comes to paying large bills. I’m sure it’s paranoia on my part, but I’m concerned that the check will not arrive to its destination or my money gets held up by Plastiq. Also, what if it gets lost or misplaced inside the tax office?
        I know this is a control freak in me talking. I’m probably one step away form being a bunker-decorating survivalist living in the woods. I do need to look into it some more and will update the post with your comment.
        I’m glad it worked out for you as far as paying off the car. Nicely done! Oh, on PayUSA tax, I actually have mentioned it before. It is a good option, and I’ve used it myself. Thanks for commenting and sharing your experience!

      • @Erik Forgot to mention… According to several blogs (including Frequent Miler), many readers have had serious issues with Plastiq Of course, people are more likely to complain when something goes wrong rather than sing praises when everything goes right. Still, it’s enough of a deterrent for a scaredy cat like myself. I might still look into it at some point if there is a promo running. Honestly, aside from a few exceptions, I don’t like paying fees of any kind when it comes to my bills.

  4. We like to use this method with paying our car insurance in a lump sum for the 6 months. And it’s actually cheeper to pay it that way as opposed to monthy!

    • @Emily I do the same thing with my car insurance. In fact, the new policy is up, so it’s time to break out my new credit card. Bills, bills bills… They just never quit coming. A nice thing about my car insurance is that they don’t charge an extra fee for using credit card. I know some companies do, though.

  5. With regards to Plastiq, I read the same blog feedback before jumping in and it seemed to me that the noise fell into 2 categories: 1) there were some initial problems in the first month of the service which seem to be corrected and 2) some people who were trying to pay entities that are not well known were having some issues while Plastiq was taking time to validate that the business was legitimate. My takeaway was that paying an entity like a bank, a government authority, an educational institution, well-known national companies, etc. using Plastiq was relatively low risk. But if I made a payment to “Bob’s Consulting Service” or “Joe the Landlord” that might take some additional time. Seems understandable. People forget that even the established payment services like PayPal can be a royal pain in the butt, as I experienced recently when trying to pay for a vacation rental to a business that has been active in that market for 2+ years. As they say, YMMV.

    • @Erik I totally agree! People who usually complain the loudest are the ones who are not following the rules. In general, when amazing hobby deal comes along, many go nuts trying to exploit the loopholes, and kill it in the process. Honestly, if this 1.5% promo is available next year, I will give it a shot.
      Oh, and Paypal can be a royal pain. You are absolutely right on that one.

  6. I liked your idea of writing down the fees you pay and adding them up at the end of the year. I’m starting next year. I do some MS to meet spending and I do pay $4.00 for $500 cards so there you go… I should figure out the fees I’d incur in when paying bills with credit cards and figure out the best strategy. I thought about plastiq and read the same post. I have taken big risks, I suppose, when I pay our mortgage with Blue Bird or Target Red Card but it has always worked out. The way I see it is like this: before discovering this hobby I couldn’t go on vacations, now I can. Yes, I want to become better at keeping track of fees but the way our family economy work, we never saved for vacations, it just never happened so if I spend $200 or $300 a year in fees and we get to go on two big trips a year as a family it’s money well spent. I know we always have to spend more money on travel expenses but the flights are paid for and that’s the big cost of traveling.

    • @Leticia What you said makes a lot of sense. Even though you pay fees now and again, the total adds up to a fairly reasonable amount. And as a result, you get to take vacations you otherwise would not be able to afford. I know you’ve mentioned before that your regular bills aren’t enough to meet the spending on most offers. In that case, MS is the way to go. If you mostly do it to meet minimum spend, the ROI is almost always terrific. Even if you pay $30 extra in fees to get 50K miles, it’s dirt cheap.
      I think as long as we are aware of what goes out of our wallet, we can be rational when it comes to multitude of offers coming at us from every direction. Sometimes it’s OK to pass on a deal even if everyone else is jumping on it.

  7. Hello Lana. I have been reading your blog for a while now and I need to ask you a few questions in regards to a trip for my brother’s wedding in Peru by April 2016. How can I share with you some more detail without making it public?

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