How Do Pay Over Time Plans Work?

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When you make a purchase, you may not want to—or be able to—pay for it all at once. Pay over time plans can make your budget a little more predictable by letting you finance credit card purchases over a period of time, sometimes with a fixed fee.

Pay over time plans differ from regular credit card payment plans in terms of how you pay to borrow money. Before you whip out your card for your next major purchase, learn more about pay over time.

What Is Pay Over Time?

A pay over time plan allows you to finance large purchases (typically at least $100) on your card. In some cases, you may be charged a fixed fee instead of interest on balances. In other cases, you may be charged interest and fees when you carry a balance.

Credit cards normally charge an interest rate when you carry a balance from one month to the next—about 16% on average as of February 2021, according to the Federal Reserve.

Pay over time plans are available from major card issuers such as American Express and Chase. The Amex options allow you to carry a balance (with interest), while the Chase option offers fixed monthly payments that could help you better manage your budget.

American Express Pay Over Time

The American Express Pay Over Time option enables cardholders to pay off charges over time rather than being required to pay off the balance each month. Some purchases aren't eligible for Pay Over Time, however, including insurance premiums, gift cards and gambling transactions.

As you make purchases with your Amex card, qualifying charges of $100 or more are placed into your Pay Over Time balance up to your Pay Over Time limit. When you make a payment at the end of your billing period, you can pay the statement balance in full, or pay the minimum amount due or any amount in between with interest. You'll pay interest only on charges you choose to pay over time. The Pay Over Time feature is also available on eligible Amex business cards.

If you don't want to use Pay Over Time, you can pay your statement balance in full each month, or you can switch off the feature by managing the settings within your mobile app or online account, or by calling Amex.

There's no time limit for wiping out a Pay Over Time balance, as long as you make at least the minimum payment by each monthly due date. Your Pay Over Time APR (annual percentage rate) can vary based on your creditworthiness. Terms apply.

American Express Pay It Plan It

Amex's Pay It Plan It program provides two ways to pay off purchases.

The Pay It feature lets an eligible Amex cardholder reduce their balance by making small payments throughout the month via the Amex app. You can use this option by selecting any posted transaction that shows the Pay It icon. You can use Pay It to make as many as five payments per day.

Meanwhile, Plan It enables an eligible Amex cardholder to divide purchase amounts of at least $100 into monthly payments for a fixed monthly fee without paying interest. You can designate up to 10 purchases to be included in Plan It. Items not eligible for Plan It include Amex membership fees and purchases with foreign transaction fees.

You may not be able to shift a purchase to Plan It if:

  • Your plan balance would exceed 95% of your account's total new balance on your last billing statement.
  • Your plan balance would exceed 95% of your credit limit.
  • You would exceed your Pay Over Time limit.

For a consumer card with a credit limit, your Plan It fee is a percentage of each purchase amount based, in part, on the APR that would otherwise apply to the purchase. For Plan It purchases, you'll be charged the plan fee each month instead of interest.

For a consumer card with purchases included in a Pay Over Time balance, the monthly fee is a percentage of each purchase amount based, in part, on the APR that would otherwise apply to the purchase and the duration of the payment plan.

For purchase amounts on a consumer card that are included in a Pay In Full balance, the monthly fee is a percentage of each purchase amount based, in part, on the APR that applies to the Pay Over Time feature at the time you create the plan and the duration of the payment plan. Terms apply.

Amex business cards are not eligible for the Pay It Plan It program.

My Chase Plan

The My Chase Plan lets you pay off a purchase over time in fixed, equal monthly payments. A My Chase Plan purchase will be charged a fixed monthly fee but no interest. Chase determines the fee based on factors such as the original purchase amount and the number of billing cycles you choose to pay off the purchase.

Eligible purchases must be at least $100. Some transactions don't qualify for My Chase Plan, such as balance transfers, cash advances and membership fees.

You can have up to 10 "plans" at one time. Each plan can last anywhere from three to 18 months, depending on your creditworthiness and account history.

Alternative Financing Options

If you're not sold on pay over time plans, you've got other options for financing purchases. They include:

  • 0% introductory APR card: With a 0% intro APR card, you can make a purchase and avoid paying interest if you pay off the balance in full before the 0% introductory period ends. Once a card's intro APR period ends, the card's higher ongoing rate will kick in and apply to any remaining balance. Many cards feature introductory periods of 15 or 18 months.
  • Personal loan: Personal loans typically carry interest rates much lower than the rates for credit cards. With a personal loan, you make fixed payments over a set period of time until the loan is paid off. Personal loans normally don't require collateral.

Bottom Line

Regardless of whether you pick a pay over time plan, a 0% intro APR card or a personal loan to finance a purchase, it's smart to check your credit score beforehand so you can qualify for the best terms possible. You can obtain your FICO® Score for free from Experian.

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