AMEX Plan-It! for PIFers (DP)

[Anonymous]

If this has been addressed, I missed it...

For those who generally pay-off CC balances BEFORE the statement cycle date (like me), AMEX CS has confirmed the FIRST STATEMENT following Plan-It enrollment MUST CYCLE in order to prevent any pre-payment of Plan-It balance(s). Upon enrolling in Plan-It last month, I paid off my monthly spend prior to the statement cut-off date (as usual) only to find that those funds were applied not to my monthly spend (as intended) but rather to my Plan-It balance (9-month plan reduced to 3 remaining payments!). Once the first statement "cuts", simply pay the "Adjusted Balance" on future statements to avoid interest charges. That said, I think I am now firmly in the "Pay AFTER Statement Cut" camp (to avoid such confusion) for all of my CCs - unless I need to maximize FICO scores for impending credit shopping/rewards chasing.

Hope this is of some help to someone...

[UncleB]

Good data point...thanks for sharing! 

[K-in-Boston]

Thanks for sharing.  It's due to the "all payments above the minimum payment must be applied to the highest APR first" part of the CARD Act, and is similar to how payments made before statement cut will be applied to POT balances prior to new charges.  Once the statement has cut, you've entered into a payment agreement on Plan It or Pay Over Time balances.

[Anonymous]

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@K-in-Bostonwrote:

Thanks for sharing.  It's due to the "all payments above the minimum payment must be applied to the highest APR first" part of the CARD Act, and is similar to how payments made before statement cut will be applied to POT balances prior to new charges.  Once the statement has cut, you've entered into a payment agreement on Plan It or Pay Over Time balances.

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Thanks K! I think I will allow my statements to cycle before PIFing and see how that works out. 

[MakingProgress]

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@Anonymouswrote:

If this has been addressed, I missed it...

For those who generally pay-off CC balances BEFORE the statement cycle date (like me), AMEX CS has confirmed the FIRST STATEMENT following Plan-It enrollment MUST CYCLE in order to prevent any pre-payment of Plan-It balance(s). Upon enrolling in Plan-It last month, I paid off my monthly spend prior to the statement cut-off date (as usual) only to find that those funds were applied not to my monthly spend (as intended) but rather to my Plan-It balance (9-month plan reduced to 3 remaining payments!). Once the first statement "cuts", simply pay the "Adjusted Balance" on future statements to avoid interest charges. That said, I think I am now firmly in the "Pay AFTER Statement Cut" camp (to avoid such confusion) for all of my CCs - unless I need to maximize FICO scores for impending credit shopping/rewards chasing.

Hope this is of some help to someone...

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I'm going to show my stupidity.  What is Plan-it ?

[Anonymous]

Okay so I PIF 99% of the time, all except a balance on one card. But I recently got the ED card with 15 months 0% APR on purchases, so I'm guessing plan it would be useless during this time right? Currently I have a small $200 blance I pan to PIF, but am getting emails from Amex for "plan it" and even POT on PRG. etc. What I'm getting at is, if Amex likes people who PIF, why is there such an emphasis on this? 

For my situation I have to carry a large balance for a few months, about 40% util on that card during the 0%. Would it then be beneficial to use Plan it versus carring a traditional balance?  I'm thining that taking the temporary hit to my score for a few months is worth the 0% APR, as I don't plan to app for anything anyways. Other than that, would it look bad with other creditors having one card with high utilization and a score drop from that? 

[HeavenOhio]

I think the advantage for AMEX is that Plan It gets people to make a commitment to making payments toward large purchases that are much higher than the minimum. It's less risky for them than customers who carry a balance under the usual scenario.

And the customer wins too. He or she pays a fee instead of interest. The huge advantage to that is having the ability to make new charges while still keeping the grace period intact.

I think you'll be fine carrying a balance that starts at 40% of your limit as long as you're not paying only the minimum month after month. It's certainly not enough to freak out other creditors. I don't see a big advantage to using Plan It during your zero percent period, but you could if you want to.

It's hard to predict what would happen to your score without further information. What are your scores right now? Do you have any baddies? What's your current overall utilization? And what's your highest individual card utilization?

[CreditInspired]

@Heaven Ohio said
I think you'll be fine carrying a balance that starts at 40% of your limit as long as you're not paying only the minimum month after month... I don't see a big advantage to using Plan It during your zero percent period,

+1

I am really taking advantage of my 0% because I don’t want to pay any fees. But granted, I’m only using 10% of my CL.

I agree, pay way above minimum payment if OP is planning on using 40% of CL.

I actually pay anywhere between 25-35x times the minimum payment.

[HeavenOhio]

It was posted in another thread that if you use Plan It during the 0% interest period, there are no fees. I suppose you could use it during the 0% period if you preferred to pick a couple of purchases and have them computed into your bill.

When taking advantage of 0% interest, I like the idea of dividing the balance by one month less than the length of the period. Target that amount as your monthly payment. That gets you done a month ahead of time, and there'll be none of the last minute surprises that could pop up if you waited.

[CreditInspired]

Thanks HeavenOhio
I did not know that the fee was cancelled during the Plan It period. Something good to know.