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What You Need to Know About the American Express Pay It Plan It® Program

Know Stewart

American Express Plan ItAmerican Express has always charted a different path than its competitors. And recently, it introduced a feature called Pay It Plan It®, which offers cardmembers alternatives to the usual pay-the-minimum-at-the-end-of-the-month model.

How Pay it Plan It works

The Pay it Plan It program has two parts – “Pay It” and “Plan It.” Both are now available on eligible American Express cards and credit cards.

Pay It: This program is available only on the American Express mobile app. It simply allows you to choose a smaller purchase amount (under $100) that you can pay instantly to reduce the balance that will appear on your statement.

Plan It: The Plan It feature allows you to pick one of several plans to extend payment on a qualifying purchase of over $100. You will be billed a fixed amount each month for the duration of the plan, which includes a financing charge. Plan payment fees are added to your monthly minimum payment balance. The plans you are offered will vary based on your creditworthiness, the purchase amount and your account history. For example, you may be offered three different payment plans, with terms extending for up to 24 months.

You can pay off a plan early and you can have up to 10 active payment plans at any time, per eligible American Express account. There is no sign up, application, or enrollment required for Plan It.

How to use Plan It

Log in to your American Express account online (or us the mobile app) and select a transaction. Next, you’ll be able to select from a list of plans offered to you, each with a monthly payment amount. The amount you owe for all your plan payments is automatically included in your overall amount due each month.

Should you use Pay It Plan It?

Pay It is no different from making an early payment toward your balance. Use Pay It via the app, or make a payment of an equal amount toward your balance anytime. It’s all the same.

With Plan It, however, things are a bit more complicated. With most credit cards, you can avoid interest charges by paying each month’s statement balance in full. However, if you fail to pay off your entire statement balance each month, then you will owe interest on all your charges.

The Plan It feature offers American Express customers a chance to extend payment on some of their charges while avoiding interest charges on the entire balance. It can simplify your financial life as well, because you’ll be paying a flat fee instead of nebulous interest charges (which can be difficult to calculate out in advance). So if you need to finance a portion of your purchases, using Plan It helps you budget because you know all the flat fees in advance.

However, keep in mind that it’s better to pay your entire balance in full before the due date and avoid interest charges and flat monthly fees altogether. A program like Plan It can save you money only if you were otherwise going to be paying interest on your entire balance. But it will always cost more than paying your balance in full before the due date.

Another drawback of Plan It is that it obscures the interest rate charged. To learn the effective interest rate that is being imposed (in the form of monthly fees), you would have to break out a calculator and figure it out yourself. Finally, the Plan It program requires you to pay the same fixed financing charges, even if you decide to make your payments in advance. In contrast, other credit cards allow you to save money on interest charges by making small payments throughout the month, or by paying off your entire balance at any time.

Bottom line

Plan It is an interesting feature that will be attractive to many American Express cardholders. Only when you understand exactly how it works, along with its advantages and disadvantages, you can decide if it’s right for you.

First published , last updated



Know Stewart

Know Stewart is one of the leading journalists covering the credit card industry and travel rewards. His work appears at many of the top personal finance websites and is regularly syndicated by mainstream sites such as MSN Money and Yahoo! Finance.

Learn more about Know Stewart

Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author's alone, and have not been reviewed, approved or otherwise endorsed by any card issuer.

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