Buy now, pay later. If you’ve ever seen this phrase in an ad, chances are it was describing the benefits of an installment plan. Whether you’re looking to buy a couch, revamp your work wardrobe or replace your old laptop, being able to take it home right away and pay in monthly installments can be very convenient.
Unlike revolving credit, an installment plan is a short-term loan that provides you with a predetermined payment schedule and set end date. It’s important to understand how installment plans work so you can make good use of the benefits.
January 11, 2024 inLearn
Benefits of a credit card installment plan
Paying for your credit card purchases through an installment plan can allow you added flexibility and control over your purchases, while still earning your card rewards as usual. For example, withPlan It®, The American Express® Installment Program, you can choose a purchase or a portion of your balance that you’d like to pay off in monthly installments. Plan It is a fully digital journey where you can create an installment plan using your Online Account or the Amex App. You will be offered 3 plan durations, anywhere between 3-12 months, based on your purchases, outstanding balance and account history1 — allowing for flexible plans and manageable payments, within a budget that works best for you.
Does an installment plan affect your available credit limit?
When you sign up for an installment plan, the total amount of your purchase is automatically deducted from your available credit. Your monthly installment amount is included in the minimum amount that is due each month. As you pay off the balance, the amount you pay is then added back to your credit limit.
Tips for making the most out of an installment plan
Consider these tips to make the most out of your installment plan:
- Understand the different types of installment plans. For example, with some installment programs you may be able to choose specific purchases to plan, while others allow you to choose a portion of your balance. Plan It conveniently provides you with both options, giving you the choice to plan a purchase or an amount.
- Know how much the loan will cost you over its lifetime, how much your monthly payments will be, and whether you will be able to make the payments.
- Set up pre-authorized payments or enroll to receive payment alerts to avoid missing due dates or paying late fees. If your direct debit is set to pay your account’s minimum due, this will include any installment amounts. If your direct debit is set to pay the full balance due, it will not include any installment balances not yet due.
- Take the time to review and understand all the terms and conditions before confirming your plan.
Installment payments can increase how much you are spending
You may be tempted to choose an installment payment plan because of their convenience and flexibility. However, this may also tempt you to make purchases you don’t really need. Proceed with caution and do not spend more than you can afford.
To learn about how Plan It works, watch this instructional video below.
Explore Lending Options at American Express
Looking for other ways to help with your borrowing needs? American Express offers a variety of different lending solutions, installment plans included, that are designed to help you take control of your finances. Learn More
- Your ability to create each new installment plan will depend on an assessment of eligibility made at the time you seek to create an installment plan. In order to create a new installment plan, your account must be in good standing and you must have a minimum $100 purchase or statement balance on your eligible Card. Any transactions related to funds advances and balances at special rates of interest will not be eligible unless we make a special offer to you. We may also limit or otherwise restrict your ability to participate in the installment program based on your account's available credit or for any other reason.Please see the Plan It (American Express Installment Program) section in yourCardmember Agreementor the ProgramTerms and Conditionsfor more details. Plan It is currently not available in Quebec, Nova Scotia, PEI or Nunavut.
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