Pay It Plan It: What You Should Know About AmEx’s Functionality
American Express’s Pay It Plan It® feature lets you pay for purchases one by one with your smartphone – and could help you save money on interest in the process.
Pay It Plan It® gives cardholders the ability to pay off small purchases immediately (Pay It®) or pay off large balances over time by implementing an interest-free payment plan with a monthly fee (Plan It ®). For those with balances, the latter option could potentially generate big savings.
How it works
Log into your AmEx Mobile app. If you don’t already have it, you can download it for free on your iPhone or Android device. You can also access the Plan It® feature by visiting the American Express website.
See which purchases are eligible. In your app, you will see icons that say “Pay®” for purchases under $ 100 and “Plan®” next to purchases over $ 100. Some transactions cannot be paid with this feature. More on that later.
For Pay It® transactions: Click on the Pay icon. If you have more than one registered bank account, you can decide which one to use. Press “Pay” to complete the transaction. At this point, you will see a pending payment notification on your balances. The payment will take up to 48 hours to be reflected in your outstanding balances. (There is no application requirement for this feature.)
For Plan It® transactions: Click on the Schedule icon, then on “Create a plan”. From there, you can choose up to three plan options, which may vary by customer. (See images below.) Instead of interest, you’ll have to pay a small monthly fee that varies depending on your credit card’s APR. If your card has an APR of 14.99%, for example, you’ll pay a monthly fee of up to 0.66% of each purchase. This would generally save you money compared to paying the regular APR. (There is no application requirement for this feature.)
Once you confirm your plan option, your next payment on the plan will be added to your “minimum due” payment on your next invoice.
Keep in mind that you can still pay your bill in any of the usual ways, such as online with automatic payment or by sending a check in the mail. This feature simply gives you additional options.
What’s the catch?
Before using this feature, you should know that it has some limitations:
This feature is not available for all American Express cards. Pay It Plan It® is an option on most AmEx consumer credit cards, but it is not available on AmEx small business credit cards.
Certain transactions are excluded from Plan It®. Some transactions that are not eligible for the Plan It® include purchases subject to foreign transaction fees, purchases of cash equivalents (for example, cash advances) and fees charged by American Express, such as than the annual charge on your credit card.
There is a limit to the number of Plan It® plans you can have. You can have up to 10 active payment plans at any one time.
There is a daily limit to the number of Pay It® payments you can make. According to American Express, you can make up to five payments per day, including payments from each device. If you want to pay off more than those five purchases per day, consider making one larger payment instead of several small ones.
American Express has a FAQ page with more specific details.
How it can help
Here’s how you can use Pay It Plan It® to your advantage.
Use Plan It® if you plan to earn interest on a large purchase. Plan It® will almost always be cheaper than paying interest on a large purchase, despite the monthly fees. If you pay your balance early, you won’t have to pay future monthly fees. However, if you have an active 0% APR purchase offer, paying off your balances over time without Plan It® would likely be cheaper.
Use Pay It® if you’re trying to keep balances low. If you’re traveling too close to your limit, using Pay It® regularly for small purchases – or, alternatively, just making additional payments throughout the billing cycle – can help keep your balances low. Reducing these balances could have a positive effect on your credit score.
Images courtesy of American Express.