Pay It Plan It® feature from American Express: What you need to know

Woman standing in her kitchen, reading on her phone about American Express' Pay It Plan It featureImage: Woman standing in her kitchen, reading on her phone about American Express' Pay It Plan It feature

In a Nutshell

The American Express “Pay It Plan It®” program allows you to pay off small amounts right away through your mobile app and split up larger purchases for a fixed monthly fee (typically a low percentage on purchases that qualify for the plan).
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Credit card interest can threaten the value you gain from a credit card — and possibly even your financial health.

With certain American Express credit cards, eligible cardholders can use the Pay It Plan It® feature to potentially save money on interest. But before you accept an offer to use the program, it’s important to know how it works to determine whether it’s worth it.

How Pay It Plan It works

The Pay It Plan It program is broken up into two features: Pay It and Plan It. Here’s how the two work and differ from each other.

Pay It

With the Pay It feature, you can conveniently make small payments to your card throughout the month with your mobile Amex app. Just log in, choose an eligible transaction under $100 and complete the payment.

Any payment you make through the Pay It plan reduces your total balance by the amount of the purchase selected, but it doesn’t necessarily pay the selected purchase — the payment goes toward your balance. Also, payments using the Pay It feature will be applied toward your minimum payment first. (And if the minimum payment due is satisfied, any additional payments using this feature will go toward your statement balance.) You can make up to five payments per day, too.

And some additional good news: There are no fees associated with the Pay It feature.

Plan It

The Plan It feature is designed for qualifying purchases of $100 or more. It allows you to pay them off over time with a monthly fee. You can have up to 10 active plans at a time.

You’ll be offered up to three payment plan options for each Plan It purchase. With each plan, you’ll see how many payments you’ll make, the payment amount and the plan fee, so that you know upfront what you’re getting.

Each month, your Plan It payments will be included in your card’s minimum amount due for that month. This means that you’ll be required to pay your regular minimum monthly payment based on your card balance plus the amount based on the Plan It payment plans you’ve created.

You can’t cancel a plan once it’s been set up, but you can pay it off early by paying the “new balance” from your most recent billing statement. Doing this will allow you to avoid future plan fees.

Which American Express credit cards offer Pay It Plan It?

Not all American Express cards are eligible for Pay It Plan It — all of its personal cards offer it, but you won’t find it on any of Amex’s small-business cards. If you have one of the following cards, you may be able to take advantage of the program’s features:

Not all cardholders are eligible to take advantage of both features — even if you have some of these cards listed. For example, Amex will consider your credit health, credit limit and other factors to determine your ability to create plans with the Plan It feature.

Other reasons you may not be able to use either Pay It or Plan It — or both — include …

  • Your card isn’t eligible
  • The purchase isn’t eligible
  • You’re an authorized user (also known as an additional cardmember)
  • Your account has been canceled
  • One or more of your Amex accounts has been enrolled in a debt management program
  • One or more of your Amex accounts has a payment that is returned unpaid or is delinquent

Should I use Pay It Plan It?

The American Express Pay It Plan It program provides some extra flexibility that you can’t get with other credit card issuers. But there are some things to consider before using either feature. Here are some situations where it might make sense.

You don’t pay in full each month

If you regularly pay your balance in full each month, making small payments throughout the month or moving eligible purchases to a fee-based plan won’t make any sense. As long as you pay in full each month, you probably won’t be paying interest anyway.

But if you’re struggling with paying off your full balance, making small payments throughout the month with Pay It toward your balance when you have the money could potentially help you reduce your credit card debt more efficiently.

You want to save money on interest

Plan fees aren’t set in stone and will vary from person to person, but if those fees are smaller than the regular interest you would pay, you could save on borrowing costs. For example, let’s say you spend $1,000 on a television and choose a nine-month plan with $111.12 monthly payments and a $8.84 monthly plan fee. In total, you’ll pay $79.56 in fees.

If your purchase APR is 20.74% and you paid down the purchase over nine months, you’d pay $88.39 in interest. That’s not a huge difference, but it could be for larger purchases, and saving a little money is better than saving none at all.

You can afford a larger monthly payment

Remember, any payments you make under the Pay It feature are applied to your minimum payment first. But if you create a plan through the Plan It feature, the required monthly payment is added to your account’s regular minimum amount due.

If you’re thinking about using this feature, make sure that you can afford the new increased minimum monthly payment. If you can’t, you could end up defaulting on the account, which can damage your credit.

You don’t qualify for a card with an introductory 0% purchase APR

If you’re expecting to make a large purchase and won’t be able to pay it off immediately, consider shopping for a credit card that offers an introductory 0% purchase APR on Credit Karma before you use the Plan It feature. These introductory offers often last longer than what the Plan It feature provides. Just keep in mind that after the intro APR expires, you’ll be facing an APR based on your credit, so make sure to read the full terms and conditions of the offer before you apply.

If you can get approved for one of these cards, you’ll not only avoid a higher minimum payment, but you may also have more time to pay off the purchase and avoid fees and interest altogether.

But if you think you won’t get approved, or you don’t want to apply for a new card, the Plan It feature may be worth considering.

What’s next?

If you have a card that’s eligible for Pay It Plan It and are considering using it, take a look at your situation to determine whether it’s the best way to structure your card payments. Look for alternatives that could save you more money, such as paying off your balance in full each month or getting a card that offers an introductory 0% purchase APR.

If you’re considering Plan It, start the process to see what your monthly payments would look like and whether you can afford it. The program is designed to give you some flexibility, but it can make your budget too tight if you’re not careful.

About the author: Ben Luthi is a personal finance freelance writer and credit cards expert. He holds a bachelor’s degree in business management and finance from Brigham Young University. In addition to Credit Karma, you can find his wo… Read more.