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Guide to American Express ‘Pay It Plan It’

Everything you need to know about this flexible payment option, including fees, tips, pros, cons and cards that offer it

Summary

“Pay It Plan It” is a flexible payment option offered by American Express in some personal credit cards. Is it worth it? Here’s everything you need to know, including fees and tips.

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Carrying a credit card balance can be convenient but interest charges make purchases more expensive, the longer you take to pay. Interest also takes away from the value of any rewards you might have earned.

American Express is making paying over time – and potentially saving on interest – easier with “Pay It Plan It,” a flexible financing option.

“Flexible financing can be a great way to avoid interest payments on big-ticket items,” says Steven Millstein, certified credit counselor and editor of credit education site CreditRepairExpert. “If you can pay off your balance early, you can avoid future monthly fees, too.”

“Pay It Plan It” may not be right for everyone, however. This guide explains the program guidelines and how it compares to other flexible financing options.

See related:8 steps to reducing credit card debt

‘Pay It Plan It’ basics

“Pay It Plan It” covers two different payment options:

  • Pay It allows you to pay offsmall purchases (less than $100) right away using the American Express app.
  • Plan It lets you split up larger purchases (over $100) into monthly installment payments with no interest charges.

Both features are available on eligible personal credit cards issued by American Express, with two exceptions:

  • Cards that are already enrolled in the Pay Over Time program.
  • Charge cards that require the balance to be paid in full each month.

That rules out the Platinum Card® from American Express and the American Express® Gold Card. But you can use it with any of these cards, as well as co-branded cards from American Express:

“Pay It Plan It” isn’t automatically included, however.

According to an American Express representative, eligibility is based on your account and credit history. If you’ve paid your bill late in the past, for example, Amex may not extend this benefit.



Eligible transactions will show a “Pay It” or “Plan It” button on the Amex mobile app (left). When creating a “Plan It” plan, you will see three different payment options (center), along with total fees and cost. When choosing “Pay It,” you will be given the option to make a payment (right).

How ‘Pay It’ works

Log in to the American Express app and view the purchases that are eligible. Click the ones you want to pay, then schedule a payment from a linked bank account.

Sounds simple, but the Amex rep clarified a few rules:

  • You must use the app to use “Pay It” – this feature won’t work from your desktop.
  • A purchase must have the “Pay It” icon next to it in order to use the feature.
  • You can make up to five payments per day, but that’s an aggregate of all payments made through the app, online or by phone.

Also, take note. You’re not necessarily paying off a specific purchase, per se; you’re just paying a specific amount toward your balance.

How ‘Plan It’ works

This feature allows you to set up a custom payment plan if you need to pay a balance over time. Payment plans can last from three to 24 months.

It works like this:

  • You choose an eligible purchase you want to pay over time, either through the American Express app or your online account.
  • Amex then gives you one to three zero-interest installment plan options to choose from.
  • Each payment option shows the number of payments included in the plan, the amount you’ll have to pay each month, the monthly plan fees and the total plan fee.
  • You pick the one you want and pay off the purchase according to the installment schedule.

Millstein says the feature’s main value lies in its transparency and simplicity.

“It’s designed to appeal to people who want to know exactly what they’re getting into, regarding the monthly fees,” he says, which is helpful for credit card users who may not fully understand how interest compounds.

‘Pay It Plan It’ is “designed to appeal to people who want to know exactly what they’re getting into, regarding the monthly fees.”

‘Plan It:’ Payoff options, fees, minimum payments

According to the Amex rep, you can have up to 10 “Plan It” plans at a time. Again, it sounds easy enough but there are a few wrinkles to be aware of.

  • Payment plan terms aren’t uniform for every cardmember. According to the Amex rep, plans are offered on a case-by-case basis based on your credit history, account history and the amount of the purchase.
  • You don’t pay interest with “Plan It,” but you do pay a fee. The fee is based on the purchase amount and the length of the installment plan.
  • You can’t pay off your plan early. The only way to pay a “Plan It” balance off ahead of schedule is to pay your entire card balance in full.

The Amex representative also explained how “Plan It” payments work if you have a balance that’s not on the installment plan.

  • You have a minimum monthly payment that’s 1 percent of your total balance plus interest, in addition to the monthly “Plan It” payment.
  • That means you could end up with a higher combined minimum amount due each month between the two payments.
  • That’s important to know so you don’t end up with a monthly card payment you can’t afford.

Other card- and app-based flexible payment options

“Pay It” and “Plan It” aren’t the only way to pay in installments.

The Pay Over Time program from American Express lets you pay both small and large purchases off over time. The difference is you’ll pay interest instead on your balance.

There are also some app-based options:

App-based payment options: Installment plan terms

Affirm

  • Pay over three, six or 12 months (up to 36 months at select stores).
  • APR range: 0 percent to 30 percent, based on credit check.
  • Down payment may be required for some users.

Afterpay

  • Pay in four equal installments, spread over six weeks.
  • Zero interest and no fees when you pay on time.
  • 25 percent of the balance is due at the time of purchase.

FuturePay

  • Minimum monthly payment as low as $25.
  • Monthly financing charge of $1.50 for every $50 financed.

QuadPay

  • Pay in four equal installments, spread over six weeks.
  • Zero interest and no fees when you pay on time.
  • 25 percent of the balance is due at the time of purchase.

Some of these, such as FuturePay, are meant to be a substitute for credit cards.

Millstein says that might appeal to millennials who may not have a credit card yet and want a way to pay over time without paying high interest rates or fees. QuadPay and Afterpay work with your credit or debit card at checkout.

Of the four choices here, Affirm has the longest repayment period, at 12 months, compared to up to 24 months with Plan It. Afterpay and QuadPay require you to pay off a purchase in a matter of weeks.

You’ll also pay up to a 30-percent APR with Affirm, versus no interest charges for Plan It.

Retailer-specific installment plans

In-store promotional financing is another flexible way to pay. These types of programs offer zero percent financing for a set time.

Josh Hastings, founder of finance blog Money Life Wax, has used deferred interest financing from Best Buy and Apple for large purchases in the past. However, he says, “whether flexible financing works for you depends on your ability to make payments on time and adhere to the repayment plan.”

Deferred-interest offers are usually advertised as charging “no interest until” a certain date. After that date, however, interest that has been accruing since the purchase date is charged to the account.

Being able to spread out payments is a plus if you don’t want to part with a large chunk of cash all at once. However, “if you’re someone who’s already tight on income each month, adding an additional payment for something that might not be 100 percent necessary isn’t the best idea,” he says.

“If you’re someone who’s already tight on income each month, adding an additional payment for something that might not be 100 percent necessary isn’t the best idea.”

Exploring other flexible payment options

“Pay It Plan It” has its benefits, but don’t count out zero-interest promotional offers for large purchases.

James Boston, co-founder of Paperlust, a custom wedding invitation and stationery company, used that option when buying equipment for his business.

He used one business card for the purchase to earn rewards and later transferred it to a different card with a zero percent balance transfer offer.

He then created his own installment payment plan for the card to get the balance paid off before the interest charges kicked in.

“We simply calculated the payback over 20 months and set up an automatic debit monthly to pay the balance down,” says Boston.

See related:9 things you should know about balance transfer cards

Considering a 0-percent balance transfer offer instead

  • If you’re considering a 0-percent purchase or balance transfer offer, pay attention to the annual fee and balance transfer fee – usually between 3 percent-5 percent of the amount transferred.
  • Break those costs down monthly and compare it to what you’d pay for the “Plan It” monthly fee.
  • American Express offers a pre-purchase calculator that you can use to run the numbers and estimate what your payments and fee would be with “Plan It.”

With any financing option, make sure it fits your budget first.

“Flexible financing is not an excuse to rack up debt with the premise of paying it off when you can afford to,” says Millstein.

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