American Express Unveils New Installment Plan for Credit Cards
American Express is changing the way it charges interest on credit card balances. Starting today, existing customers can take advantage of the “Plan It Pay It” program to set up separate installment plans for large credit card transactions.
The goal is to encourage budget-conscious consumers to make large purchases on their credit cards without worrying about paying off their balances at the end of the month. Small transactions, like coffee or movie tickets, are sorted into one category. Those purchases can all be paid for at the end of the month without any interest accrual.
Transactions over $100 can be put on an installment plan, like a separate personal loan through the credit card. The terms of the installment plan will depend on the cost of the transaction. There is a finance fee assigned to each plan, but it will not affect other purchases on the card.
Installment plans are set up through the AmEx mobile app. There, users can choose to “pay” for transactions under $100 or “plan” installments for higher-value transactions. There are different options available for each transaction, so users can pick the term that best suits their needs and budget.
Once an installment plan has been set up, the “minimum due” payment on the account will include the installment value, plus the minimum for other purchases on the card.
Not all transactions qualify for Plan It Pay It. Cash advances and purchases with a foreign transaction fee cannot be put on a payment plan. Users can set up a total of 10 installments on their accounts.
American Express has also set up a system allowing users to immediately pay off purchases with their bank accounts. After selecting to Pay It, a customer can select a bank account on file to cover the transaction. The payment will post to the account within 48 hours. There is a limit of five pay-offs per day.
About Bill Hardekopf
Bill Hardekopf is the CEO of LowCards.com and covers the credit card industry from all perspectives. Bill has been involved with personal finance for over 15 years. He is a frequent contributor to Forbes, The Street and The Christian Science Monitor.