The Pros And Cons Of Using CardUp For Your Recurring Bills

At DollarsAndSense, we’re firm advocates of smartly using credit cards on things you need and would already be spending cash on. In addition to having an interest-free advance on that money, you’ll rewards in the form of cashback, miles, and discounts.

Unfortunately, there are many kinds of expenditures that you need to spend on a regular basis, but miss out on getting rewarded because they do not accept credit card payments. This is the problem that CardUp aims to solve.

CardUp’s value proposition is simple but compelling: what if you could enjoy the same credit card rewards for spending on things like paying rent to your landlord, tertiary school fees, insurance premiums, and other categories of expenditure that you previously weren’t able to use your credit cards on?

Let’s examine how it works and whether you should make use of it.

Read Also: Here’s Why You Should Always Choose Credit Cards Over Debit Cards

How CardUp Works

CardUp is a service that makes bank transfer payments that you designate on your behalf and then charges that amount (plus a 2.6% transaction fee) to your credit card, thus allowing you to earn cashback or air miles on that spend that you otherwise would not have received. Your recipient doesn’t need to sign up with CardUp or even know about it.

Making use of CardUp is really simple.

Step 1: Sign up for an account on their website.

Step 2: Add your credit cards you’d like CardUp to charge your payments to and earn rewards on.

Step 3: Designate one-off or recurring payments.

That’s it! You’ll receive notifications every time your credit card is charged, and when the payment is credited to your recipient’s bank account. There is also a handy dashboard for you to see and change your designated payments, or change the cards you’ll like to use.

Pros # 1 Earn Credit Card Rewards For Spending That Is Otherwise Not Eligible

As mentioned earlier, the biggest value proposition offered by CardUp is the ability to use your credit card to pay for common big-ticket items like rent, insurance, tuition fees, and more.

Payment types like insurance premiums are typically excluded by banks from earning rewards, but by using CardUp, you can continue earning miles, cashback, and points as well. This gives you more out of your mandatory spending.

Pros # 2 Ability To Schedule Recurring Transactions Automatically

Another benefit that CardUp’s service provides is to automatically schedule recurring payments so that they go out automatically, without any intervention on your part. This convenience can be really attractive since paying the same installment payments every month is something no one enjoys.

Note that you need to schedule your payments at least five days before your desired transaction date. Three days before each scheduled transaction, you’ll receive an SMS notification to remind you about it, so you can cancel or amend it if necessary. This is really helpful in case you forgot that you don’t need to make any payment that month, or need to change the amount that is to be paid.

Pros # 3 You Can Use CardUp Even If Your Recipient Doesn’t Accept Credit Cards

CardUp does a bank transfer to your recipient, so it doesn’t matter whether or not they accept credit card, and neither do they need to be registered with CardUp.

CardUp already has many recipients on its platform, but if you still can’t find yours, all you need to do is to set up a new recipient so that the transfer can go through. In addition, you can even set up recurring payments so you don’t have to log in every month just to transfer the same amount.

Cons # 1 Processing Fee

CardUp charges a 2.6% processing fee, so the convenience of paying with credit cards needs to be worth at least that to you.

Alternatively, if you’re using CardUp for the cashback or air miles rewards from your credit card, then it is essential that your card’s rewards outweigh the processing fee.

If you have the wildly popular card for miles lovers, UOB PRVI Miles Card, you earn 1.4 miles per dollar (mpd) here’s how your cost-benefit calculation would look like over 1 year:

Paying $3,500 in monthly rent/insurance/car loan using CardUp: $3,500 x 12 = $42,000

CardUp transaction fee: $42,000 x 2.6% = $1,092

Miles earned: $(42,000+1,092) x 1.4mpd = 60,328

With 60,328 miles, you can redeem a return Economy ticket (Economy Saver) to Cape Town, South Africa and explore the peak of Table Mountain! Buying an equivalent ticket would set you back about $2,200, which means you effectively save more than $1,000 – without spending on additional items you wouldn’t already be paying for!

Cons # 2 Rewards Are Dependent On Your Credit Card Provider

Credit cards all have different exclusions about what kind of credit card spend qualifies for rewards, as well as caps on the amount of rewards you can receive in a month.

You can check with your bank or the CardUp team to on how your CardUp payments will be categorised and what you’ll earn from transactions.

Cons # 3 Limited Set Of Payments Available

Currently, CardUp supports a number of payment types such as rent, insurance, income tax, season parking, condominium maintenance fees, etc. This already makes it immensely useful, but we would like to see even more payments supported.

For payment types not found on their dashboard, you can still set it up under the ‘Miscellaneous Payments’ category, and CardUp will review the payment.

Read Also: 7 Online Shopping Hacks That All Singaporeans Should Use To Save Money

In its current form, CardUp is a already service with a valuable and powerful use-case today.  If you like the convenience and flexibility that CardUp offers, then this could be useful to you and it’s worth signing up to give it a try.

Don’t forget to use our promo code below to enjoy $30 off CardUp fees on your first payment. 

This article was first published in September 2018 and has been updated to ensure the accuracy of the information.