American Express has launched Plan It instalments, which is designed to allow all American Express Card Members to pay their cards off in instalments rather than in one lump sum.

This guide takes a look at this new feature and how it compares with other Buy Now Pay Later (“BNPL”) products in the market, such as Afterpay.

What is Plan It?

American Express Plan It instalments allow Card Members to spread out their card repayments over a 3, 6 or 12-month timeframe, giving members greater flexibility in how they manage their finances.

The feature is currently open to personal American Express Credit Card Members only, meaning that charge cardholders, such as those who hold an American Express Platinum Card are not eligible, nor are David Jones Credit and Store Cards Card Members, Business Card Members, like those holding the American Express Qantas Business Rewards Card and Corporate Card Members.

How does it work?

Card Members can spend on their card as usual, and once their monthly card statement arrives, can choose to create a Plan It instalment plan that will allow them to pay off a portion of their balance on a monthly basis, incurring a small fixed monthly charge.

As an example, should I have a balance of $2,0000 to pay off on my statement, I can elect to create a Plan It instalment and choose to pay $681.27 monthly over 3 months, $347.94 monthly over 6 months or $181.27 over 12 months.

Cardmembers are offered three payment periods when they elect to create a Plan It instalment plan.

American Express has provided a calculator to determine what your level of repayments are based on your outstanding balance and preferred timeframe.

There is no stipulation that you must stick to the repayment timeframe and you are free to make earlier repayments or pay off the plan early.

How to create an instalment plan?

You can create a new instalment plan through your Online Account or through the Amex App in three simple steps:

  1. Choose how much of your balance you want to pay off through Plan It
  2. Select your plan
  3. Review and submit your plan

How is this different to Afterpay?

While Plan It is a BNPL product offering exclusive to American Express Card Members, there are a number of differences with other popular BNPL products such as Afterpay.

While Afterpay requires the payment of all your outstanding balance over 4 equal fortnightly payments, Plan It allows you to select your repayments over three different timeframes as shown above.

Also with Afterpay, you don’t have to pay any fees if you pay your instalments off in time, however, late payment charges will apply if you’re unable to pay on the due date.

Plan It does have a small fixed monthly charge but does come with that added flexibility in repayment timeframes.

Summing up

The option to spread your credit card repayments over multiple months is welcome given that it will allow American Express Card Members to better manage their finances.

It is good to see that the feature offers flexibility in terms of how repayments can be made, with additional or early repayments allowed.

Card Members will need to weigh up the cost of accessing the feature with the benefit they can gain from managing their finances better and hopefully avoiding interest charges. And while there are other deferred repayment options in the market, such as Afterpay, this option does provide a number of repayment terms that are not available elsewhere.

Frequently asked questions

Am I eligible to use Plan It?

Most American Express Card Members can enjoy Plan It, with the exception of David Jones Credit and Store Cards, as well as American Express Corporate, Small Business and Charge Cards.

Card Members who hold an eligible card are able to start creating instalment plans via your Online Account or the Amex App.

How do I create a plan?

Card Members can create a new instalment plan through their Online Account or through the Amex App in three simple steps:

Step 1 – Choose how much of your balance you want to pay off through Plan It
Step 2 – Select your plan
Step 3 – Review and submit your plan

Are there fees for using Plan It?

Yes, there is a fixed monthly plan fee on each instalment plan. This monthly plan fee will be charged each month that the plan is active.
 
When a new plan is created, the term and fee options that are available will be shown, where Card Members can decide what works best for them.

Until 30 September, the fee is fixed at 0.73% of the starting plan balance for all cards except the LOw Fee Rate and Essential card, which will incur a fee of 0.42%. Post this, the percentage fee of the starting plan balance will range from 0.42 to 1.04%, dependent on the type of American Express card held by the Card Member.

Can multiple plans be created at once?

Yes, Card Members can create multiple instalment plans per month, and the amount of plans that Card Members can have at once depends on their Card and credit limit.

How much of the balance can be paid off with Plan It?

The minimum amount that Card Members can pay off with Plan It is $150. There’s no fixed maximum amount, however, it must consist of new purchases from their most recent statement. When Card Members create a new plan, they will be shown this amount.

Can Additional Card Members use Plan It?

No, only primary Card Members and Authorised Account Managers with full access to the primary Card Member’s account can create instalment plans.

Can I cancel my plan?

Yes, if Card Members can cancel their instalment plan at any time with no cancellation fee. Any remaining plan balance will go back onto their standard balance and any monthly plan fees already billed will not be refunded.
 
American Express will send Card Members a confirmation that they have received their request to cancel their plan. It takes 24-48 hours for Card Member balances to update after cancelling a plan.

How do I change my plan?

At this time, it’s not possible to make changes to an instalment plan once it’s been created.

Further FAQ can be found here.

American Express launches Plan It payment instalments was last modified: July 30th, 2020 by Daniel Sciberras