AMEX Plan It on Charge Cards

[Anonymous]

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@NRB525 wrote:

I created a Plan It on my Hilton card in January. $1,431 amount. Monthly fee of $9.48, so 0.6% per month on the original amount. Minimum calculated rate then is 8%, however as you pay down the plan over the term, the remaining balance drops, so the interest rate steadily increases.

But one of the advantages of Plan It is, you can pay it off to stop the monthly fees, so can be a good source of short term financing.

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I did the same with my AmEx Aspire back in November.  $3668 for 18 months, monthly fee $41.67.  Paid a few balloon installments and balance is currenlty $1681 and fee has decreased to $39.  Should have this paid off 4 months early and will save $100 on interest.  APR for purchases is 24.65%.  The only thing I don't like is that it doesn't breakdown how much extra pay is going to the PlanIt balance vs the regular balance.  My payments always exceed the min required but it seems that my regular balance needs to be 0 before extra payment applied to Plan It balance.

[Anonymous]

Really? If I recall correctly, they apply anything over the minimim and Plan It payments combined to whatever "regular" balance is left.

Unless there is no "other" balance then they would apply the amount to the Plan It balance. 

The Plan it balance should remain the same according to the terms. So the only way to pay more would be to either call them and explain it, or not have a regular balance on the card when you do. Or PIF any remaining balance.

[Anonymous]

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@Anonymous wrote:

Really? If I recall correctly, they apply anything over the minimim and Plan It payments combined to whatever "regular" balance is left.

Unless there is no "other" balance then they would apply the amount to the Plan It balance. 

The Plan it balance should remain the same according to the terms. So the only way to pay more would be to either call them and explain it, or not have a regular balance on the card when you do. Or PIF any remaining balance.

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To clarify: the "balloon payments" were made when my regular balance was 0.  I was just commenting the observation.

[jamesdwi]

For those that are thinking about buying a house or car in the near future using POT can cause major issues with your DTI,  an your minimum payment will include your payment to complete your plan-it payment. charge $6,000, and select 12 monthly payments, your minimum payment is reported at $500 plus any other charges you have on the card. Depending on your underwriter, they may include it. Where as the same $6000 on a revolver may raise your minimum payment a couple of hundred. $300 could make a big dent in your DTI calculation. 

[Brian_Earl_Spilner]

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@Anonymous wrote:

So i'm guessing that Amex decided it was simply too confusing having two seperate POT options? Or that they experienced enough issues with cardholders over the differrence to warrant the change?

Because why would they opt to keep the automatic version versus the one the cardholder can choose?

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Personally, I think they're doing it to lower the risk of someone defaulting. By forcing all of the $100+ charges into POT, a person is no longer required to PIF. It gives a person payment flexibility.

[Anonymous]

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Makes sense, but there were a few thread here a while back citing confusion on what amount to actually pay.

For the unsuspecting person it could cause them to pay interest inadvertently, by only paying the "payment due". 

Then again I guess it's up to them to do the homework as with anything in life. 

@jamesdwi wrote:

For those that are thinking about buying a house or car in the near future using POT can cause major issues with your DTI,  an your minimum payment will include your payment to complete your plan-it payment. 

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This is a major reason why I've never bothered with it.

[NRB525]

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@Anonymous wrote:

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Makes sense, but there were a few thread here a while back citing confusion on what amount to actually pay.

For the unsuspecting person it could cause them to pay interest inadvertently, by only paying the "payment due". 

Then again I guess it's up to them to do the homework as with anything in life. 

@jamesdwi wrote:

For those that are thinking about buying a house or car in the near future using POT can cause major issues with your DTI,  an your minimum payment will include your payment to complete your plan-it payment. 

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This is a major reason why I've never bothered with it.

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This is where I re-emphasize that people who want to understand Plan It, should do a small Plan It.

This image is from my January statement, where I paid off another Plan, then added a new Plan It amount.

In the upper left box, with three bold headlines, you have three amounts:

1) PIF

2) Adjusted Balance to pay the Plan It plus the rest as PIF - AMEX has an AutoPay option to select this Adjusted Balance each month. Meaning, if you have a Plan It going, Autopay adjusts. However if no Plan It is open, then PIF is the remainder for the Autopay.

3) and the All Around Minimum Payment if you want to keep the Plan, and let the other balances incur regular interest expense.

I don't know how AMEX could make this any clearer or easier.

So if folks want to comment on Plan It, perhaps experience a Plan first?  

[Remedios]

While I dont meet the criteria for talking about Plan because I dont have a charge chard, that would be hella confusing (at least in the beginning ) for anyone who opted not to waste time on the credit card webz 

[NRB525]

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@Remedios wrote:

While I dont meet the criteria for talking about Plan because I dont have a charge chard, that would be hella confusing (at least in the beginning ) for anyone who opted not to waste time on the credit card webz 

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Charge card or AMEX Revolver? Plan It is not yet available on the Charge cards. The example above is from a Hilton revolver. Current state.

[Remedios]

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@NRB525 wrote:

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@Remedios wrote:

While I dont meet the criteria for talking about Plan because I dont have a charge chard, that would be hella confusing (at least in the beginning ) for anyone who opted not to waste time on the credit card webz 

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Charge card or AMEX Revolver? Plan It is not yet available on the Charge cards. The example above is from a Hilton revolver. Current state.

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Oh. Well 

I havent tried it. I see it below the charges, but never really attempted to use it. 

So I have a question, if you create a plan, when does the fee show up? After the statement? What happens if you change your mind and pay whole balance, do you still have to pay a fee if its assessed?