Amex Plan It warning.... Read if you plan on using Plan It while still using card!

[vic6string]

Ok, so I just noticed an issue that is totally my fault (not blaming Amex) but it is something that can very easily affect any of you. I put an $900 purchase on my BCP and used Plan It to break it up into 3 payments. So, last month my first payment was due. The way it works is they show you the usual New Balance (let's say it was $1200 to make math easy) and an adjusted balance that takes into account your Plan It payment (so $900/3 is $300). Since you are only responsible for that $300 on the Plan It (the other $600 is the next 2 months of $300 payments) Amex shows you an Adjusted Balance of $600 ($1200-600). So far so good? Ok.

So, I made my payment of $600 which meant I was now at an adjusted $0 balance. I use that card for gas and groceries and a couple of other things, so I ran up another $700 worth of purchases, and I like paying stuff off before it posts to stay as close to $0 as possible, and we were getting close to the end of the month, so I paid another $700 to cover those purchases. (Some of you have already figured out where this is heading). A few days later I get an email thanking me for paying off my Plan It. You see, anything you pay above your Adjusted Balance will first go towards your previous bill's New Balance (which includes any unpaid payments towards Plan It plans), and THEN to your current purchases, so the extra $700 paid off the next two months of Plan It, finishing that up, and only the $100 after that went towards the current month purchases. Oops.

It isn't a huge deal, but it can be really confusing, especially since you can have multiple Plan It plans at the same time. I use Google sheets to track my budget, and I was trying to figure out why the numbers didn't match because I treated the Plan It payments as seperate from the rest of the Amex balance. So I ended up prepaying $600 that would not have any interest while racking up $600 that could incur interest if I don't pay it off. As for credit reporting, they report the full balance, so that is no different. 

Just figured I would put this out there as this is a mistake I can see anyone easily making.

[Remedios]

That's spelled when you're creating a plan. I cannot remember exact language but something like "any payment over the adjusted balance will be applied towards the Plan It amount first". 

If you have plan(s) in place, and dont want to prematurely pay them off, limit yourself to one payment per month. 

[NRB525]

Good advice OP. 

I would add that Plan It works best if one pays based on the printed statement. There is an AMEX autopay setting which picks up the adjusted payment balance: all new charges not in a Plan, plus the Plan It payment amounts from however many Plans you've got going. 

[K-in-Boston]

Always a good thing to remember!  And while there is no technically no interest accrued on Plan It since there is a monthly Plan Fee instead, this does apply the payment in the spirit of the CARD Act since new purchases have a grace period and Plan It balances would be subject to a monthly plan fee when the statement closes.

[Remedios]

What about this plot twist

I have a bunch of plans because of no fee offer.

Whenever six months option was present, I picked it, but some started with 12 months.

If I make extra payment (in addition to adjusted balance) will it be applied to plans with shorter or longer duration? 

[K-in-Boston]

Payment would be applied to plan(s) ending soonest.

In the rare case where the Plan Fees are different rates, payment should be first be applied to the one(s) with the higher rate(s).

[Anonymous]

Wait a minute, so you're not saying that they will apply anything over the minimum to the Plan it if you have curent charges, right? Otherwise how would current charges ever get paid off. If your Planit payment is $45 per month and you charge $150 to the card, wouldn't you then pay $195 for the total payment which satisfies the minimum and pays the new charge off?

I don't generally have a Plan it on the same card I use daily, but recent used my ED card for something by mistake. So I paid the minimum plus the new charge, I guess I'll see how that works out. 

On this particular subject I have the free plan it offer as well and I wished I would have waited to buy a new bed. Though rigth now I just don't have any  major purchases, at least not by August 10th. 

[Brian_Earl_Spilner]

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@Anonymous wrote:

Wait a minute, so you're not saying that they will apply anything over the minimum to the Plan it if you have curent charges, right? Otherwise how would current charges ever get paid off. If your Planit payment is $45 per month and you charge $150 to the card, wouldn't you then pay $195 for the total payment which satisfies the minimum and pays the new charge off?

I don't generally have a Plan it on the same card I use daily, but recent used my ED card for something by mistake. So I paid the minimum plus the new charge, I guess I'll see how that works out. 

On this particular subject I have the free plan it offer as well and I wished I would have waited to buy a new bed. Though rigth now I just don't have any  major purchases, at least not by August 10th. 

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The payment for the month was already made. Any new payments will go towards the existing balance, not any new charges. You'd have to wait until the next statement to make sure it goes where it's supposed to.

[TSlop]

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@Brian_Earl_Spilner wrote:

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@Anonymous wrote:

Wait a minute, so you're not saying that they will apply anything over the minimum to the Plan it if you have curent charges, right? Otherwise how would current charges ever get paid off. If your Planit payment is $45 per month and you charge $150 to the card, wouldn't you then pay $195 for the total payment which satisfies the minimum and pays the new charge off?

I don't generally have a Plan it on the same card I use daily, but recent used my ED card for something by mistake. So I paid the minimum plus the new charge, I guess I'll see how that works out. 

On this particular subject I have the free plan it offer as well and I wished I would have waited to buy a new bed. Though rigth now I just don't have any  major purchases, at least not by August 10th. 

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The payment for the month was already made. Any new payments will go towards the existing balance, not any new charges. You'd have to wait until the next statement to make sure it goes where it's supposed to.

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I was about to ask this question before you answered it. I was going to say Best Buy is the opposite of Amex, but your post explains why I "think" it is opposite, when it really isn't. I always let my statements cut and PIF, so I've never ran into this issue.

[HeavenOhio]

I suppose an option in a case like this could be to start a new plan with the new charges.