What you need to know about credit cards with buy now, pay later options
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When shopping online, you’ve probably seen the possibility of splitting up your purchases over time with services like Afterpay, Klarna, and Affirm. With âbuy now, pay laterâ services, also known as point-of-sale loans, consumers can split their purchases into installments every two weeks over a six-week period. This means that consumers can purchase expensive items, like a mattress or computer, or smaller items, such as 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 are 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 finance their purchases by making the purchase with their credit card, then going to the corresponding website or online banking app to view. whether 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 equal to or less than the APR you would get if you had a balance on your card, so you could save money using a BNPL loan. However, you will have to compare the interest rates or fees of the BNPL loan and your card. For all BNPL loans, your down payment is added to your minimum credit card payment each month.
Below, Select takes a look at the various BNPL plans provided by Amex, Citi, and Chase and takes a look at the pros and cons of each.
American Express ‘Pay It Plan ItÂ®’
Amex recently announced that its BNPL âPay It Plan Itâ option is available to select US cardholders with The American ExpressÂ® Green Card, American ExpressÂ® Gold Card and Platinum CardÂ® from American Express cardholders.
There are two different financing options with âPay It Plan Itâ. The âPay It Outâ option is for qualifying purchases under $ 100. With âPay It,â consumers can make small payments to clear individual purchases under $ 100 throughout the month, which is like paying off a portion of your credit card bill each month. With these small purchases, you don’t really fund them like you would with a BNPL loan.
“Plan It” is for more expensive 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 an Amex BNPL loan for up to ten purchases of $ 100 or more. With “Pay It Plan It”, cardholders receive rewards on their purchases. If you have used a BNPL loan from a provider like Afterpay, you will not receive cash back or rewards.
However, âPay it, schedule itâ has a major downside – you’ll have to pay a fixed fee when using the service. The fees are based on your creditworthiness and are equal to or less than the standard APR for your Amex credit card, an Amex spokesperson told Select.
Although “Plan It” has a longer repayment period than many standard BNPL loans, your total plan fees could end up costing you dearly if you don’t read the fine print. Amex provides a “Plan It” calculator to help consumers understand their monthly payment amounts.
Fortunately, Amex currently offers a $ 0 âPlan Itâ option for plans made between November 1 and December 31, 2021. For a limited time, consumers can share the cost of their Christmas gifts without having to pay the â Plan It ” costs. However, this option is not available to everyone, so be sure to check the terms and conditions.
In addition, new cardholders who get the Blue Cash EverydayÂ® card from American Express, the Blue Cash PreferredÂ® card from American Express, or the American Express Cash MagnetÂ® card can get a $ 0 Plan It fee on loans during the first 12 to 15 months of card membership.
My pursuit plan
My Chase Plan is the BNPL option offered by Chase and is available on most of its cards, as the Chase Sapphire ReserveÂ® and Chase Freedom UnlimitedÂ®. With the My Chase plan, consumers can use a BNPL loan to pay for certain purchases over $ 100 that were purchased less than 90 days ago and have not been paid on their regular credit card bill. .
Consumers can finance their purchases over three to eighteen months. The length of your repayment period depends on your creditworthiness and your account history. Consumers typically have one or two payment plan options and are limited to using the My Chase plan on a maximum of ten purchases at a time.
Similar to Amex’s âPay It Planâ, consumers will have to pay a fixed fee based on the amount of the purchase, the length of the repayment period, and other factors.
To use My Chase Plan, you can use the mobile app or website to choose a purchase that you want to split over time. You are still eligible to earn rewards on purchases under the My Chase plan.
Unlike Amex ‘Pay It Plan It’, there are no $ 0 fee offers, so if you want a longer period to pay for your purchases, you can just go for a new credit card with a 0% APR introductory period like the Wells Fargo Reflectâ Card (0% introductory APR up to 21 months from account opening for qualifying purchases and balance transfers; variable APR of 12, 99% to 24.99% thereafter).
Citi Flex Pay
You can use Citi Flex Pay in two ways, on Amazon or on purchases you’ve made on your credit card. Unlike Amex and Chase which have a fixed fee per installment, Citi Flex Pay has an APR with monthly installments. You will 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 greater than $ 75 and you must select an eligible Citi card at checkout to receive the BNPL option. With Citi Flex Pay on Amazon, loan terms are three to 48 months, depending on the value of the loan. For a limited time (offer ends December 23, 2021), Citi Flex Pay with Amazon offers 0% APR for loans up to 12 months, making it a good choice for people who shop a lot. vacation on Amazon.
If you use Citi Flex Pay on your credit card purchases elsewhere, they must be over $ 75 and made in the last billing cycle. To use Citi Flex Pay, all you need to do is select a purchase to see if it is eligible and if so, you will receive different payment plans with a fixed APR.
Using the BNPL option on credit cards is relatively straightforward: you make the purchase, check the app or website to see if it is eligible for BNPL, and choose a payment plan with an APR or fixed costs.
One of the advantages of using a BNPL loan is that you will know in advance how much your monthly payments are. However, if you want to avoid paying interest or fees, you’d better just use the credit card and pay off your balance on time and in full every month.
You may also consider opting for a card with a 0% APR introductory period if you need a longer repayment period on your purchases. Consumers can take advantage of some of the 0% APR or $ 0 BNPL Fee promotional offers offered by Citi and Amex, but these are only available for a limited time.
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To find out the prices and fees of the Amex green card, click on here
To find out the prices and fees of the Amex Gold card, click on here
To find out the prices and fees of the Amex Platinum card, click on here
To find out the prices and fees for Amex Blue Cash Everyday, click on here
For pricing and fees for Amex Blue Cash Preferred, click here
To know the prices and fees of the Amex Cash Magnet, click on here
Editorial note: Any opinions, analysis, criticism or recommendations expressed in this article are the sole responsibility of the editorial staff of Select and have not been reviewed, endorsed or otherwise approved by any third party.