It works like this: You use a third-party payment processor like Plastiq, which charges a fee, but lets you pay bills (including government ones) with a credit card. You earn points. You build cashflow. And if you play your redemptions right, you come out ahead.
This also works for Americans. Just swap the cards and providers, try Melio. (Bonus: US fees are often lower.)
The Math (Canada Edition)
Plastiq now lets you pay the CRA with a reduced fee of 2.49% (normally 2.9%).
Let's say you're using an American Express Business Platinum Card in Canada. You earn 1.25 Membership Rewards points per dollar.
You make a $10,000 tax payment through Plastiq.
- Plastiq fee = $249
- Points earned = 12,500
Now comes the question: is it worth it?
If you cash those points out as statement credit or gift cards at 1 cent per point, you're getting $125 in value. That's a loss.
But if you transfer to travel partners like Aeroplan, where values range from 2 to 4.5 cents per point, your 12,500 points could be worth $250 to $562.50.
Net gain? Up to $313.50, plus 45 extra days of cash flow. Sometimes you can even get upwards of 10 cents per point with creative transferring & deals.
When This Makes Sense
- You have a premium card that earns well on Plastiq payments
- You know how to redeem points for high-value travel rewards
- You want to float a large payment and delay the cash hit
When It Doesn't
- You redeem points poorly (gift cards, cashback)
- You carry a balance and get hit with interest
- You're not tracking fees or redemptions closely
Bottom Line
Using a credit card to pay taxes in Canada through Plastiq isn't a free lunch. But it can be a smart move, if you know how to squeeze the most out of your points.
More points. More cash flow. More money for you.