American Express introduces 'Plan It' payment instalment option

Amex users can now split parts of their credit bill into further instalments. How will it work and is it worth it?

Person paying by credit card online
(Image credit: Getty Images)

American Express (Amex) credit card customers are being offered a new tool to split payments on purchases.

As with any credit card, users can make a purchase and then pay the bill at the end of the month, but Amex has unveiled a new tool called Plan It, which lets users select an instalment plan instead for parts or all of their latest statement.

It comes amid the rising popularity of buy-now-pay-later (BNPL) schemes, which let customers spread the cost of a purchase and pay it off interest-free in equal instalments as long as the payment is made on time.

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The Amex offer isn’t a BNPL scheme and is arguably less risky as you are using a regulated credit card provider and are able to complain to the Financial Ombudsman Service if things go wrong.

Amex argues that Plan It gives customers more flexibility in how they repay their credit card bill.

There are some limits to watch out for though.

What is the Amex Plan It tool?

The Plan It tool offers a different way for Amex customers to pay their credit card bill.

A credit card is an effective way to make purchases and in the case of Amex you could also earn cashback or Avios points.

As long as the bill is paid off each month there will be no interest charged.

But Amex is offering a different way to payoff some of a credit card bill.

Amex customers will be able to select a transaction or an amount from their most recent statement to put into an instalment plan for three, six or 12 months.

How does Plan It work?

Plan It is available on most major Amex credit cards such as its Platinum Cashback or British Airways American Express Credit Card but not charge cards.

Once your statement is ready, you will be able to select a transaction or a series of payments to put into the Plan It scheme and spread them over a three, six or 12-month time period in return for a monthly fee.

This can be setup in your Amex online account or through the app.

The amount must be a minimum of £100 and can be worth up to a maximum of 85% of the statement balance.

You still earn Avios, membership rewards or cashback if your card is eligible.

The Plan It instalment plan is automatically included in your minimum due payment each month. If a customer does not pay their monthly minimum due payment, in full, for two consecutive statements, any instalment plans on the account will be cancelled and it will be added to the main balance. Late fees may also be charged.

How much does Plan It cost?

The monthly fee for Plan It will depend on how much is in the plan and its length.

 The longer the instalment plan, the more you will pay.

MoneyWeek understands that the fees will be comparable to the interest a cardmember would have paid if they had carried the same balance on their account, without the instalment plan.

Is Plan It worth it?

It is always positive to have more choice when it comes to repaying any type of bill.

Plan It offers Amex customers more flexibility and transparency on how much you will pay for the plan.

But it involves an extra level of administration as you need to make sure you keep on top of the instalment repayments as well as the rest of your credit card balance.

That may work for those who are good at budgeting and keeping on top of various different bills.

But paying off your credit card in full each month is often the best way to manage you account to avoid interest being added.

If you fail to keep up with your instalment payments then just like any credit card bill, you risk late payment fees and could end up having an arrears or default added to your credit report.

Some may question if a credit card is right for you if you also need to further spread the payments on your credit card bill as you risk racking up further interest being added.

If you have large credit card debts, it may even be worth considering a balance transfer credit card where some offer interest-free repayment period.

Marc Shoffman
Contributing editor

Marc Shoffman is an award-winning freelance journalist specialising in business, personal finance and property. His work has appeared in print and online publications ranging from FT Business to The Times, Mail on Sunday and The i newspaper. He also co-presents the In For A Penny financial planning podcast.