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It shows up in my online account. Has anyone used it and was it worthwhile? Seems like its payment related but not sure of the details
It lets you put purchases over $100 into what is more or less an installment plan. It doesn't create a separate account, but the balance uses up part of your credit limit.
You keep your grace period. Amex technically doesn't charge interest but instead charges a fee that it adds onto each statement. Amex generally offers a choice on how long you want to pay it off, between 3 and 24 months. But you won't know how long you can stretch payments out until the purchases have posted to the card and you go to make a plan. There is no guarantee of getting at least a year or anything like that.
I may be describing some little detail incorrectly. I've only used it during no-fee promotions when I could avoid interest and plan fees altogether.
Sounds good, @wasCB14.
Additionally, money due on plans plus fees are tacked on to your minimum payment. To keep your grace period intact you'll want to pay the "adjusted statement balance." A handful of data points indicate that the amount of the fee usually translates to an interest rate a bit below the regular rate on your account. Plans created during a card's 0% interest period have no fees.
Because of the increased minimum payments, plans can put a surprisingly big dent in one's DTI. That's not a big deal unless you're applying for credit.
I would read their T&C very closely. I've used it before and had a couple of surprises. Took a bunch of phone calls w/ different departments and weeks to sort it out. The average CR will not be able to help you w/ Plan It issues. Do make the payments well in advance of the statement closing dates because it has to do w/ how your payments are applied. Dont take my word for it because I'm doing it from memory but payments are applied first to: adjusted balance (plan fees + new non-plan charges), plan principle (w/ oldest plan first then other plans if you have multiple).
Do the math on the monthly plan fees as well. I've played around w/ them each time I've charged a large amount. For me it varies btw 9-26% so some times it's more than my APR.
How payments are applied can get complicated, but that's true for many cards. It's fairly simple for me because I pay the no-fee plan installment amount, as well as accumulated non-plan charges that would otherwise trigger interest if I wasn't PIFing.
One complication is that even though I'm set up with ebills, I have to read the actual bill to know how much to pay. When Amex sends ebills to Schwab, it suggests two payment amounts:
#1. The current portion of existing plans plus the minimum payment due on recent purchases not in plans.
#2. The full balance of existing plans and the full statement balance of recent purchases not in plans.
The ideal amount to pay is actually in between these...the current portion of existing plans and the full statement balance of recent purchases not in plans. I PIF the purchases that would otherwise trigger interest and carry aggressively the purchases that don't. But if you are paying a fee on a plan, then allocating a payment to regular purchases vs. a plan can get complicated.
@kudosalert wrote:I would read their T&C very closely. I've used it before and had a couple of surprises. Took a bunch of phone calls w/ different departments and weeks to sort it out. The average CR will not be able to help you w/ Plan It issues. Do make the payments well in advance of the statement closing dates because it has to do w/ how your payments are applied. Dont take my word for it because I'm doing it from memory but payments are applied first to: adjusted balance (plan fees + new non-plan charges), plan principle (w/ oldest plan first then other plans if you have multiple).
Do the math on the monthly plan fees as well. I've played around w/ them each time I've charged a large amount. For me it varies btw 9-26% so some times it's more than my APR.
I have never heard of a Plan fee being higher than the APR on the account. It's literally meant to save people who have to carry a balance money. AMEX gives you a discount for making a commitment to pay the balance back in monthly installments.
I have used Plan It a few times and it seems like it has a lot of promise but for example, my Amazon Prime was like $128 and I was offered a plan for 12 months with no fee but a $280 cable bill I was only offered 3 months with no fee (both of these were on a card with 0% intro APR so the fee was waived as well). The fact that it's so variable makes it a bit less useful really.
If you go pull your cardmember agreement (log in on the website and go to account services, scroll down and you'll see a link to request it and it will generate one for you), you can find your maximum Plan fee. Here is mine for my BCP:
"Plan Fee (Fixed Finance Charge)
0.00% introductory monthly plan fee on each purchase amount moved into a plan through your billing period that ends in October, 2020. After that, your monthly plan fee will be up to 1.06% of each purchase amount moved into a plan based on the plan duration, the APR that would otherwise apply to the purchase, and other factors."
My card has a regular APR of 23.99% so the maximum Plan fee is a little more than half of my regular APR.
@wasCB14 wrote:How payments are applied can get complicated, but that's true for many cards. It's fairly simple for me because I pay the no-fee plan installment amount, as well as accumulated non-plan charges that would otherwise trigger interest if I wasn't PIFing.
One complication is that even though I'm set up with ebills, I have to read the actual bill to know how much to pay. When Amex sends ebills to Schwab, it suggests two payment amounts:
#1. The current portion of existing plans plus the minimum payment due on recent purchases not in plans.
#2. The full balance of existing plans and the full statement balance of recent purchases not in plans.
The ideal amount to pay is actually in between these...the current portion of existing plans and the full statement balance of recent purchases not in plans. I PIF the purchases that would otherwise trigger interest and carry aggressively the purchases that don't. But if you are paying a fee on a plan, then allocating a payment to regular purchases vs. a plan can get complicated.
On my AMEX revolvers, I have the Autopayment set up to pay "Adjusted Balance". That way, if I select a Plan It amount, AMEX automatically takes all the new non-Plan It amounts, the PIF portion, and the necessary Plan It payment amount, and I don't have to do no math, no nuthin'.
There is also an option to do "Minimum Payment" but then I'd start paying interest on regular spend (not Plan It items) and I don't want to do that. I also don't want Total New Balance, because, whelp, I have a Plan It going on.
Yet another round in the Push vs Pull payments argument, which I will always vote for Pull / Autopay initiated by my credit card bank
Plan its are great if you are offered to do them for 0% and no fee...
I use them periodically, you can actually re-bundle a Plan-it.... by adding other charges to a plan it...
Its a little tricky because you dont want to make the first payment immediately after you create the plan-it..
Useful side feature on Amex cards.. makes more sense than the 6 mo 0$ vs the equal pay option.. (easier to use the equal pay for figuring out the adjusted payment)... gets confusing once you decide to spread it out on your terms..
-J