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Amex offers credit card users new ways to pay

“Pay it Plan it” permits pay as you charge or installment plans

Payment flexibility and financial control are the appeals of new American Express plans. Payment flexibility and financial control are the appeals of new American Express plans.

In a bid to add appeal for millennials, American Express has introduced two new options for paying with selected credit card accounts.

With “Pay it” users can pay at point of sale with their mobile app and decide to have that purchase paid for out of a linked transaction account immediately, avoiding adding that purchase to their balance.

With “Plan it,” card holders can opt to shift certain purchases over $100 into a fee-based installment plan.

Payments on those purchases can be spread over three to 24 months for the price of the fee, in lieu of interest. Minimum monthly payments associated with the card account would include the monthly installment payment due on any plans set up through the app.

How plans work in practice

Customers can decide how to treat their purchase by clicking on either a “Pay it” or “Plan it” icon displayed next to the charge when it appears on the app. The plan option offers three payment plan choices and discloses the applicable monthly fee. The choices offered hinge in part on creditworthiness, account history, and the purchase amount.

The pay option actually applies the payment to the total outstanding card balance, rather than directly to the purchase, according to a company FAQ. Up to five such payments can be made daily, and the company says it can take up to 48 hours for the payment to be reflected.

“Plan it” plans can also be set up via the Amex website, while “Pay it” can only be accessed through the app.

These new options are being offered at present on more than a dozen credit cards offered by American Express. These include such cards as the EveryDay Credit Card, Blue, Delta SkyMiles Credit Card, Hilton Honors Card, and the Optima Card. The program at present does not include American Express charge cards, such as the traditional Green Card.

“Pay It was inspired by Card Members who prefer making multiple payments throughout the month. Now we've made it even easier to do this in our app,” says Kartik Mani, head of Global Consumer Lending at American Express. “For larger purchases, we developed Plan It to give Card Members another way to pay over time with a ‘no surprises’ plan that offers transparent, monthly payments for a fixed fee.”

Other plans out there

Already media writeups have compared the plan option to the retailer “layaway plan,” although by comparison traditional layaway didn’t permit possession of a purchase until the goods were fully paid. Some fintech providers offer variations on the payment plan idea:

• Affirm, a payments app company started by PayPal co-founder Max Levchin, offers app users the ability to make purchases from over 1,000 participating online stores through installment payment plans. The company’s loans are actually made by partner Cross River Bank. The company says over 1 million payment plans have been set up.

• PayPal also offers credit options, including the availability of installment plans for purchases at participating merchants.

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