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Million Mile Secrets reader Steve commented:
Do you still advocate the use of ChargeSmart to pay down loans using a credit card for those companies that don’t accept credit card payments?
About to close out a lease and buy the car, but want to meet minimum spend requirements and use the card to pay.
Steve plans to buy a new car and wants to know if he should use ChargeSmart to meet minimum spending requirements. He should only use ChargeSmart to meet minimum spending requirements on big sign-up bonuses like the 50,000 United Airlines miles offer on the Chase United Explorer card.
I’ll explain why!
But there is a BIG difference with Evolve Money vs. Chargesmart. Steve can’t use a credit card directly with Evolve Money, he has to buy gift cards which is a hassle for some folks. Chargesmart is MUCH easier to use!
Steve can use ChargeSmart to pay his:
- Auto loan
- Utility bill
- Cable bill
- Student loan
- Department store credit card
- Credit card payment
Why Steve Should Use ChargeSmart to Meet Minimum Spending Only
But I wouldn’t use it regularly (outside of the sign-up bonuses) to earn miles and points outside of the minimum spending.
So Steve will pay either a flat rate fee or a “blended” fee which includes a percentage charged by the biller. Steve won’t know the exact amount of the fee until he Clicks on “Make a Payment.”
Steve pays the fee each time he uses ChargeSmart. Because the fees add up, Steve should only use ChargeSmart to meet minimum spending requirements and not on a regular basis.
And Steve pays a higher fee when he uses a credit card vs. his debit card.
A. Car Loan paid with credit card
If Steve financed his new car through American Honda Finance Corporation and uses his credit card to pay his $356 monthly payment, he would pay a fee of ~$11 each time he uses ChargeSmart.
B. Car loan paid with debit card
If Steve pays with his debit card, he would pay a fee of ~$9 each time he uses ChargeSmart to pay his car loan.
Although Steve has to pay a fee to use ChargeSmart, it makes sense if he has a lot of minimum spending to meet.
It takes time to drive to buy PIN-enable gift cards and load them to Bluebird. And Steve can only load $5,000 a month on Bluebird.
Although Steve pays ~$8 more (~$11 fee to use a credit card on ChargeSmart – ~$3 fee for gift card) to use ChargeSmart, Steve saves time and gas.
But unlike Evolve Money, Steve pays a flat rate or blended percentage fee to use ChargeSmart. And Steve pays a higher fee if he uses a credit card instead of a debit card.
ChargeSmart is MUCH easier to use than Evolve money and some folks could prefer paying the fee for the sign-up bonus.