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…
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