What to Know About Credit Cards That Offer “Buy Now, Pay Later” Options

What to Know About Credit Cards That Offer “Buy Now, Pay Later” Options

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When shopping online, you’ve probably seen the option of splitting your purchases over time with services like After-payment, Klarna and To assert. With “buy now, pay later” services, also known as point-of-sale loans, consumers can split their purchases into installments due every two weeks over a six-week period. This means consumers can buy big-ticket items, like a mattress or computer, or smaller items, like t-shirts and jeans, without having to pay the full cost of the purchase up-front.

While many consumers flock to BNPL providers for loans, credit card companies and payment processing services like Mastercard and PayPal are currently offering their own BNPL options or considering rolling out their own service. If you are hesitant to use a BNPL provider, you might be tempted to use the BNPL option offered by your credit card company.

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Amex, Citi and Chase cardholders can choose to use a BNPL loan to fund their purchases by making the purchase with their credit card and then visiting the relevant online banking website or app to view if the item is eligible for a loan.

While it might seem like a good idea to use a BNPL loan through your credit card issuer rather than carrying a balance on your credit card each month, you might not save money in the long run. . Consumers who use the BNPL options offered by Amex, Citi and Chase will have to pay a fixed monthly fee or a fixed APR.

The fee or APR is equivalent to or lower than the APR you would get if you carried a balance on your card, so you could save money by using a BNPL loan. However, you will need to compare the interest rates or fees on the BNPL loan and your card. For all BNPL loans, your installment payment is added to your minimum credit card payment each month.

Below, Select looks at the different BNPL plans provided by Amex, Citi and Chase and looks at the pros and cons of each.

American Express ‘Pay It Plan It®’

Amex recently announced that its BNPL “Plan It” option is available to select US cardholders with The American Express® Green Card, American Express® Gold Card and The Platinum Card® from American Express.

With, ‘Pay It’ consumers can make small payments on individual purchases under $100 throughout the month, which amounts to paying a portion of your credit card bill. With these small purchases, you do not finance them as you would with a BNPL loan.

‘Plan It’ is for larger items; qualifying purchases must be over $100. With “Plan It”, payment plans range from three months to 24 months. Not all purchases are eligible and in order to spread the cost of a purchase over time you will need to use the American Express app or website. Cardholders can use the “Plan It” feature for up to 10 purchases of $100 or more.

With “Pay It Plan It”, cardholders receive rewards on their purchases the same way they do when they use their Amex card. If you used a BNPL loan from a provider like Afterpay, you will not receive cashback or rewards.

“Plan It” has one major drawback: you will have to pay a flat fee when using the service. The charges are based on your creditworthiness and are equal to or less than the APR that would apply to your charge, an Amex spokesperson told Select. ‘Pay It’, on the other hand, has no fees.

Although ‘Plan It’ has a longer repayment period than many standard BNPL options, you may pay interest on these charges. Amex provides a Plan It Calculator to help consumers understand the amount of their monthly payments.

Amex currently offers a $0 “Plan It” option.* for plans made between November 1 and December 31, 2021. For a limited time, consumers can share the cost of their holiday gifts without having to pay the “Plan It” fee. However, this option is not available to everyone, so be sure to check your card’s terms and conditions. Plans created after December 31, 2021 will have a flat monthly fee based on the fees disclosed in the holder agreement.

Additionally, new cardholders who obtain the American Express Blue Cash Everyday® Cardthe Blue Cash Preferred® Card from American Expressor the American Express Cash Magnet® Card can get $0 “Plan It” fees on loans for the first 12-15 months of card membership*. Plans created after this period will have a fixed monthly fee based on the fees listed in the holder’s contract.

My hunting plan

My Chase Plan is the BNPL option offered by Chase and is available on most of its cards, as the Chase Sapphire Reserve® and the Hunt Unlimited Freedom®. With the My Chase plan, consumers can use a BNPL loan to pay for certain purchases over $100, purchased less than 90 days ago and not paid on your regular credit card bill.

Consumers can finance their purchases for three to eighteen months. The length of your repayment period is based on your creditworthiness and account history. Consumers are typically offered one to two payment plan options and are limited to using the My Chase plan for up to ten purchases at a time.

Like the Amex “Pay It Plan It,” there are flat fees that consumers will have to pay that are based on the amount of the purchase, the length of the refund period, and other factors.

To use My Chase Plan, you can use the mobile app or the website to choose a purchase you want to spread over time. You are still eligible to earn rewards on purchases under the My Chase plan as well.

Unlike Amex ‘Pay It Plan It’, there are no $0 fee offers, so if you want a longer period of time to pay for your purchases, you can simply upgrade to a new credit card with an introductory period of 0% APR like the Wells Fargo Reflect℠ Card (0% introductory APR for up to 21 months from account opening on eligible purchases and balance transfers; 13.24% – 25.24% variable APR thereafter; see rates and fees). The introductory fee for the Reflect card is 3% ($5 minimum) of the amount of each balance transfer for 120 days from account opening. After that, up to 5% for each balance transfer, with a $5 minimum.

Citi Flexible Payment

You can use Citi Flex Pay in two ways, on Amazon or on purchases you have placed on your credit card. Unlike Amex and Chase which have a flat fee per installment, Citi Flex Pay has an APR with monthly installments. You’ll also earn rewards as you normally would with a Citi Card.

If you choose to use Citi Flex Pay on Amazon, your purchase must be over $75 and you must select an eligible Citi card at checkout to qualify for the BNPL option. With Citi Flex Pay on Amazon, loan terms range from three to 48 months, depending on loan value. For a limited time (offer ends December 23, 2021), Citi Flex Pay with Amazon is offering 0% APR on loans up to 12 months, making it a good choice for people who do a lot of holiday shopping on Amazon.

If you use Citi Flex Pay on your credit card purchases elsewhere, they must be over $75 and made within the last billing cycle. To use Citi Flex Pay, simply select a purchase to see if it is eligible and if it is, you will receive different payment plans with a fixed APR.

At the end of the line

*For Amex Green Card rates and fees, click here

*For Amex Gold Card rates and fees, click here

*For Amex Platinum Card rates and fees, click here

*For Amex Blue Cash Everyday rates and fees, click here

*For Amex Blue Cash Preferred rates and fees, click here

*For Amex Cash Magnet rates and fees, click here

Editorial note: Any opinions, analyses, criticisms or recommendations expressed in this article are those of Select’s editorial staff only and have not been reviewed, endorsed or otherwise endorsed by any third party.

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