Is paying rent with a credit card profitable? AT&T Access More + Plastiq

A question has been floating in the air – can you make $ by paying rent with your credit card? The short and sweet answer is yes. Now how much profit, if any, you can make depends on the rent paying service you use, credit card(s) you have, and the way you consume points acquired in the process. In this article, I will break down the math and give simple formulas for couple of scenarios.

Now, before you get started, here are two things you need:

1. Citi AT&T Access More credit card
2. Plastiq online account
   • signup using my referral and get 200 fee-free dollar (FFD) after you make a payment of at least $20
3. (optional) Citi Premier or Prestige

What is FFD?

“Fee-free dollars (FFDs) correspond to how much money you can send via Plastiq without any fees. FFDs may be applied to individual or recurring payments via the payment review screen. Please note that if you don’t use or earn FFDs for 90 days, your balance will be reset to zero.”

Essentially, it is a way for you to lower your Plastiq fee even further. As stated above, you can earn 200 FFD by signing up from my referral link above. Then forth, like me, you can earn 400 FFD for referring other users. You may read more about FFD on Plastiq’s blog post.

Citi AT&T Access More and Plastiq

Plastiq charges 2% fee on mastercard credit card and it just so happens that Access More is a mastercard. Now, when making rent payment through Plastiq, if you choose “Rent, Mortgage and Real Estate” then Citi will code it as “Real Estate Agents and Managers Rental” and you will get 3x TYP for every $ spent. Since you can redeem TYP at 1 cent each for mortgage and student loan, a decent chunk of folks are looking at flat 1% profit. Alternatively, you could also redeem TYP for giftcards.

Enter Citi Premier

When you have Citi Premier, 1 TYP is worth 1.25 cent towards airfare, hotels, cruises, and car rentals booked through ThankYou Travel Center. So, 3 TYP = 3*1.25 = 3.75 cents and thus you will be have a net profit of 1.75%

It is also worth mentioning that Citi Premier (or Prestige) holders are able to transfer TYP to transfer partners. It is entirely possible for you to get an even better redemption through transfer partners.

Enter Citi Prestige

When you have Citi Prestige, 1 TYP is worth 1.33 cent towards airfare, hotels, cruises, and car rentals booked through ThankYou Travel Center. So, 3 TYP = 3*1.33 = 3.99 cents and thus you will be have a net profit of 1.99%

However, an added perk of Prestige is that 1 TYP is worth 1.60 cents towards american airline ticket. So, 3 TYP = 3*1.60 = 4.8 cents and thus you will have a net profit of 2.8%

 

Accounting AF of Access More

The annual fee of Access More card is $95. However, every year you spend $10,000 you will be rewarded 10k TYP. Again, the value of 10k TYP varies based on what cards you have or don’t have. Either way, worst case scenerio 10k TYP is $100. Now, in order to meet $10,000 yearly expense, on average you need to spend $ 833.33 every month. So, if you plan to only put plastiq rent expense on this card, then make sure your monthly rent (including plastiq fee) is at least $833.33.

How much profit are we taking?

Let’s build an ideal case first:

• Assume Charlie uses plastiq to pay $ 10,000 in rent (assume fee is included in 10k).
• At the end of the year he will earn 10000*3 (from plastiq) + 10000 (anniversary bonus) = 40k TYP.
• At the end of the year he will pay 2% of 10000 (to plastiq) + 95 (AF of CC) = $295 in fees.
• If 40k points is worth $400 then net profit is $105.
• If 40k point is worth 40k*1.25 = $500 (Charlie has Premier and is redeeming for travel) then the net profit is $205. Note: this also applies to Prestige after devaluation on July 27th, 2017 (see below).
• If 40k point is worth 40k*1.33 = $532 (Charlie has Prestige and is redeeming for non-AA ticket) then profit is $237.
• Finally, if 40k point is worth 40k*1.60 = $640 (Charlie has Prestige and is redeeming for AA ticket) then profit is $345.

Now that we have build an ideal case, let’s talk about your case. How much do you have to multiply $ 10k by to get your annual rent (include plastiq fee for accuracy)? For example, if Joe were to pay $26k annually (again include plastiq fee for accuracy) then he needs to multiply 10k by 2.6 since 10k * 2.6 = 26k.

Once you have this multiplication factor (2.6 in above case), just multiply appropriate net profit with the multiplication factor. For example, if Joe has Premier and wishes to redeem TYP towards travel, then his annual profit would be 205*2.6 = $533.

Again, this value already accounts AF of Access More. I also assume that you will at least put 10k annual expense on the card through Plastiq. Do note that this calculation does not account AF of Premier or Prestige, nor does it take FFD into consideration.

How does Prestige devaluation effect my profit?

At the time of writing this article, the announcement of devaluation was not made. But now, we have learned, starting July 27, 2017, the following two changes will effect above calculations:

1. 1.60 cpp on AA will be removed all together.
2. 1.33 ccp on any airline will be nerfed to 1.25. This is essentially the rate that Premier currently provides.

Basically, if you want to consider devaluation, use numbers I provided for Premier and you will be all set.