By Stephanie Miller


5 Min. To Read

* Editorial Disclaimer

This post may contain references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. The content or opinions contained within this post come from third party journalists or members of the Editorial Team and are not supplied by any of our partners.

In order to avoid high interest charges and a spiral into credit card debt, you need to pay off your balance in full each month. But what about those times when you need to make a large purchase and don’t want to (or can’t) pay it all off at the end of the month? Well, thanks to two new repayment features introduced by American Express, you now have options.

If you have an American Express credit card, you may already know about the Plan It installment feature. It was introduced a few months back as a way to let cardholders pay back larger purchases in installments, without incurring interest charges.

Let’s take a look at this new feature and how it could help you when it comes to managing your larger expenses.

What is Plan It?

I’ve been seeing a little blue “Plan It” button next to my American Express card’s larger charges for a few months now. However, even though I noticed that it only appeared on charges over $100, I didn’t really understand what it did.

My curiosity led me to push that button a few times, so I knew that Plan It gave me the option to repay that specific charge back over a certain period of time (of my choosing). Even still, I didn’t really see how it could be much benefit to me. After all, why would I want to stretch a specific charge out over more time, racking up additional interest? Plus, how would the company separate that charge out without applying my monthly payment to it?

After learning more about Plan It, I now see how it could be a really useful feature. It’s especially helpful in situations where a large emergency expense pops up, but you don’t have the savings set aside to cover it. Or, if you want to make a larger purchase and don’t have the flexibility of a 0% interest credit card offer, Plan It can be the next best option.

With Plan It, you can take any charge of $100 or more (on qualifying American Express cards) and opt to pay off the charge in equal installments, similar to a retail line of credit or small personal loan. The repayment period can be anywhere from 1-6 months, according to what American Express wants to offer and what you can afford.

How Much Plan It Costs

There are a few important things to remember when considering a Plan It repayment on your Amex.

First of all, when you choose to Plan It, the installment amount will be added to your monthly minimum payment. So if your monthly minimum payment is $100 and you set up a Plan It repayment equal to $35 a month, you’ll now need to pay at least $135 total. So, be sure to factor that into your budget.

Plan It transactions won’t incur interest as the balance carries over from month-to-month. Instead, you will be charged a set monthly fee, which is laid out for you when you enroll your purchase in the Plan It feature. While you can’t cancel a Plan It once it’s set, you can pay off your purchase earlier than planned. If you choose to do so, you won’t incur any additional monthly fees.

This can be a great way to spread out a large repayment without being charged high interest. Plus, if you pay it off early, you won’t even have to pay the total fees of your chosen installment!

Why It’s Better Than a Retail Card or Loan

You may be wondering why you’d want to opt for a Plan It installment repayment versus just financing a purchase through the retailer, or even getting a personal loan. The biggest reason, for me, would be the impact to your credit. The next biggest reason would be for simplicity’s sake.

If you were to open a new line of credit through a retailer, such as company-direct financing, you would see a few new hits to your credit score. There would be the hard inquiry when you apply, the drop to your average age of accounts once the new line of credit opens, and the debt itself. Depending on how high your purchase amount is compared to your total new line of credit, you may also bump up your utilization.

With Plan It, none of these happens. You are using an existing card, so there’s no new credit check or new account to open. You’ll add the debt to your credit report, but that will just be added in with the rest of your card’s account balance – nothing new will show up. If you have a high credit limit on your card, this might not even have a big impact on your credit utilization.

American Express cards’ Plan It feature isn’t something you’ll want to rely on regularly. However, if you need to make a big purchase (and want to earn the rewards for doing so), it can be very useful. In fact, it can easily be more beneficial to your budget and your credit score than the same amount of debt on a new retail line of credit or card.

If you carry select American Express cards, you may want to see if Plan It is available to you. While it won’t replace emergency funds or help you avoid carrying any debt, it might be exactly what you need in a pinch.

In order to avoid long-term debt, you need to pay off your card balance in full each month. But what about those times when you need to make a large purchase and don’t want to (or can’t) pay it all? Well, thanks to two new features introduced by American Express, you now have options.

Table of Contents