Pay Down Debt and Get Cash Back With These 6 Services
Discover six innovative services that let you pay off debt strategically while earning valuable cash back rewards on everyday payments.
Paying off debt doesn’t have to mean missing out on rewards. By routing your debt payments through specialized services and credit cards that offer cash back, you can earn rebates while reducing your balances. This approach works best if you pay off your credit card in full each month to avoid interest charges, turning routine payments into opportunities for savings. These six services help consolidate bills, loans, and other obligations onto rewards cards, potentially yielding 1-5% back on every dollar paid.
Before diving in, note that success requires discipline: always have the cash ready to clear your card balance immediately. Fees from some services may offset rewards, so compare rates carefully. Services like these have helped users earn hundreds annually while chipping away at debt, but they’re not a substitute for budgeting or high-interest payoff strategies.
1. Plastiq: Pay Any Bill With a Credit Card
Plastiq allows you to pay virtually any bill—rent, utilities, loans, taxes, or even contractors—with a credit card, even if the payee doesn’t accept plastic. This bridges the gap for non-traditional expenses, letting you earn cash back on payments that would otherwise be check or ACH only. For debt repayment, use it for mortgage, auto loans, or student loans, earning 1-3% from your card while Plastiq charges a 2.5-2.9% fee.
The math: On a $1,000 loan payment with a 2% cash back card and 2.85% Plastiq fee, you net about -$0.85 per payment after rewards. But for high-reward categories or intro offers, it flips positive. Ideal for one-time large debts or when chasing sign-up bonuses. Limitations include a $100,000 annual cap per payee and no recurring for some bills. Always verify merchant coding to ensure rewards post correctly.
- Best for: Large, infrequent debt payments like tuition or medical bills.
- Pro tip: Pair with cards offering 5% rotating categories if applicable.
- Caveat: Fees can exceed rewards; calculate net gain first.
2. RadPad (Now RentTrack): Rent Payments With Rewards
Rent is often a debtor’s largest expense, yet few landlords take cards. RadPad (rebranded as RentTrack) charges renters a 2.99% fee to pay rent via credit or debit, sending a check or ACH to the landlord. Earn cash back on your full rent amount—say 1.5% on a $1,500 monthly rent nets $22.50, minus $44.85 fee, but better with premium cards.
For debt-focused users, this frees up cash for extra principal payments elsewhere. Some cards like Chase Sapphire Reserve offer 3x points on travel, but rent often codes as ‘other’ for 1x. Users report earning $200+ yearly on rent alone. Ensure your lease allows electronic payments to avoid violations.
| Card Example | Rewards Rate | Net on $1,500 Rent (2.99% Fee) |
|---|---|---|
| Chase Freedom Unlimited | 1.5% | -$22.35 |
| Citi Double Cash | 2% | -$19.35 |
| Amex Blue Cash Preferred | 1% (non-grocery) | -$34.35 |
Net losses are common, but sign-up bonuses (e.g., 60,000 points) make it worthwhile for one year.
3. PayPal Bill Pay or Venmo: Peer-to-Peer Debt Settlement
For personal debts like loans from friends, family, or informal IOUs, use PayPal or Venmo to send payments via credit card. Fees are 2.9% + $0.30, but you earn rewards on the transfer. Example: Repay a $500 friend loan with 2% cash back ($10 reward) minus $14.80 fee = net loss, but convenient for splitting shared debts.
Great for couples dividing expenses—one pays via rewards card, the other reimburses cash. Track with apps to avoid disputes. Not for formal creditors, as they rarely accept these.
- Pros: Instant, trackable; builds credit utilization if paid off.
- Cons: High fees; Venmo limits $60/week free transfers.
4. Bilt Rewards: Rent, Utilities, and More Without Fees
Bilt Mastercard revolutionizes rewards by offering points on rent without transaction fees—up to 100,000 points/year. Pay rent directly (1x points), or other bills via BiltPay for 1x. No issuer fees, and points transfer to airlines/hotels. For debt payoff, route utilities or HOA fees here while attacking high-interest cards separately.
5. Loan Servicers Accepting Cards: Student, Auto, Personal Loans
Many lenders now allow credit card payments for student loans (e.g., Navient, Nelnet), auto loans, or personal lines. Check portals—some charge 2-3% fees, others free during promos. Earn 1-5% back depending on card category (education often 1x, but bonuses help).
Federal student loans via StudentAid.gov don’t accept cards directly, but third-parties like PayMyTuition do for a fee. Accelerate payoff: Pay minimum via card for rewards, extra via ACH. Watch for cash advance coding, which earns no rewards and accrues interest immediately.
6. Utility and Service Billers: Direct Card Acceptance
Over 100 utilities accept cards fee-free or low-fee (e.g., ConEd, PG&E via Speedpay). Medical bills, insurance premiums, and phone often do too. Consolidate onto one rewards card: A household paying $500/month in utilities at 2% cash back earns $120/year free.
For debt synergy, cut discretionary spending to boost these payments, reducing balances faster. Apps like Doxo aggregate bills but add fees—stick to direct where possible.
Maximizing Rewards While Minimizing Risks
To succeed: Pay balances in full monthly—interest (15-25% APR) erases rewards. Track net rewards minus fees with spreadsheets. Target sign-up bonuses: Spend $4,000 in 3 months for 75,000 points ($750 value). Avoid cash advances or balance transfers, which don’t qualify.
Pros of early debt payoff include stress relief, interest savings (e.g., $1,500 on a 5-year $20k car loan at 3%), and freed cash flow. Cons: Short-term liquidity crunch or minor credit dips from closed accounts. Gamify with apps tracking progress.
Frequently Asked Questions (FAQs)
Q: Can I really earn cash back on debt payments without extra spending?
A: Yes, by routing existing payments (rent, loans) through rewards cards via these services, as long as you pay off the card fully to avoid interest.
Q: Are fees always worth the rewards?
A: Not always—calculate: Rewards rate > service fee for net gain. Use for bonuses or high-reward cards.
Q: Does this hurt my credit score?
A: No, if balances stay low. Paying debts improves scores long-term; avoid maxing cards.
Q: What’s the best card for this strategy?
A: Flat-rate like Citi Double Cash (2%) or category leaders like Bilt for rent.
Q: Can I use this for credit card debt?
A: No—never pay one card with another; focus on high-interest payoff first.
Final Tips for Debt Freedom
Combine with budgeting: Use debt avalanche (high-interest first) or snowball (smallest first). Build emergency fund post-payoff. These services turn liabilities into assets, but discipline is key. Track progress monthly—many clear $10k debt in 25 months with $500 payments.
References
- 5 Ways to Earn Cashback Rewards Without Extra Spending — Wise Bread. 2010-approx (evergreen finance advice). https://www.wisebread.com/5-ways-to-earn-cashback-rewards-without-extra-spending
- 4 Ways to Make Debt Repayment Fun — Wise Bread. 2010-approx. https://www.wisebread.com/4-ways-to-make-debt-repayment-fun
- 5-Day Debt Reduction Plan: Pay It Off — Wise Bread. 2010-approx. https://www.wisebread.com/5-day-debt-reduction-plan-pay-it-off
- Paying Off Debt Early: Pros and Cons — Nevada State Bank. 2022-11-01. https://www.nsbank.com/personal/community/two-cents-blog/2022-11-01-paying-off-debt-early/
- 6 Foolish Ways to Pay Down Debt — Wise Bread. 2010-approx. https://www.wisebread.com/6-foolish-ways-to-pay-down-debt
- 10 Worst Ways to Pay Off Your Credit Card Debt — Wise Bread. 2010-approx. https://www.wisebread.com/10-worst-ways-to-pay-off-your-credit-card-debt
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