Ready to unlock financial flexibility with American Express? Whether you're looking to consolidate debt, fund a major purchase, or simply need some extra cash, American Express offers various borrowing solutions designed to fit the needs of its Card Members. This comprehensive guide will walk you through the process, step by step, to help you understand how you can leverage your relationship with Amex to borrow money.
How to Borrow Money from American Express: A Step-by-Step Guide
Step 1: Are You Eligible? Let's Find Out Together!
The very first and most crucial step in borrowing money from American Express is determining your eligibility. Amex primarily offers personal loans and other borrowing options to its existing Card Members. So, if you don't already have an American Express card, that's your starting point!
Sub-heading: Understanding Amex's Primary Lending Products
American Express generally offers a few key ways for Card Members to borrow money:
American Express Personal Loans: These are unsecured loans that provide a lump sum of money, typically for larger expenses like debt consolidation, home improvements, or significant life events. They come with fixed interest rates and repayment terms.
Plan It® Installment Program: This feature is built into many eligible American Express Credit Cards and allows you to pay off specific purchases (typically $100 or more) over time with a fixed monthly fee, instead of accruing traditional interest.
Cash Advance (from your credit card): While an option, this is generally not recommended for borrowing money due to high fees and immediate interest accrual. We'll touch on it, but it's important to understand its drawbacks.
Sub-heading: Checking for Pre-Approval
For American Express Personal Loans, the process usually begins with a pre-approved offer. American Express often extends these offers to eligible Card Members based on their creditworthiness and other factors.
Action: The easiest way to check if you have a pre-approved offer for a personal loan is to log in to your American Express account online or use the Amex Mobile App. Look for a "Borrowing Centre" or "Personal Loans" section. If you have an offer, it will typically display your maximum eligible loan amount, potential interest rates, and repayment options.
Step 2: Navigating American Express Personal Loans
If you've found a pre-approved offer for an American Express Personal Loan, congratulations! This is often the most advantageous way to borrow a larger sum of money.
Sub-heading: What You Can Use the Loan For (and What You Can't)
American Express Personal Loans offer flexibility, but there are some important restrictions.
Common Uses:
Debt Consolidation: Consolidating high-interest credit card debt from other banks into a single, fixed-rate loan can simplify your payments and potentially save you money on interest. Note: You typically cannot use Amex personal loan funds to pay down balances on American Express-issued cards.
Home Improvement Projects: Funding renovations, repairs, or upgrades to your home.
Major Purchases: Covering the cost of significant expenses like a large appliance, a new furniture set, or a planned vacation.
Unexpected Expenses/Life Events: Addressing unforeseen costs or financing a wedding, a new baby, or moving expenses.
Prohibited Uses:
Post-secondary Educational Expenses: Student loans are a separate category.
Real Estate Transactions: Including the purchase of property.
Business Expenses: These loans are for personal, family, or household purposes.
Financing a new vehicle (except for a downpayment): While you can use it for a downpayment, a full car purchase isn't typically allowed.
Paying down balances on American Express-issued Cards: This is a crucial point to remember for debt consolidation.
Sub-heading: The Application Process for Personal Loans
Step 2.1: Review Your Offer Carefully. Take your time to understand the loan amount, the Annual Percentage Rate (APR), the repayment terms (e.g., 12, 24, 36 months), and the total amount you'll repay.
Step 2.2: Choose Your Loan Details. If you proceed, you'll typically select the exact loan amount you wish to borrow (up to your pre-approved maximum) and your preferred repayment period.
Step 2.3: Provide Necessary Information. You'll need to confirm personal and financial details, including your income and the purpose of the loan. American Express states that applying for the loan does not impact your credit score, but accepting the loan may.
Step 2.4: Receive a Decision. Many applicants receive a decision within seconds. In some cases, Amex may require additional information, which could delay the decision.
Step 2.5: Funds Disbursement. If approved and you accept the loan terms, funds can be deposited directly into your bank account as fast as one business day after you sign your loan agreement and complete any necessary verification steps.
Step 3: Understanding the Plan It® Installment Program
The Plan It program is an excellent alternative for managing specific, larger purchases on your existing American Express credit card, offering a different approach to borrowing.
Sub-heading: How Plan It Works
Eligibility: Plan It is available on eligible American Express consumer credit cards. There's no separate application or credit check for each plan, as it operates within your existing credit limit.
Identifying Eligible Purchases: When you log into your Amex online account or use the Amex app, eligible purchases (typically $100 or more) will have a "Plan It" icon or option next to them. You can also create a plan for a portion of your current statement balance.
Creating a Plan:
Step 3.1: Select Your Purchase(s) or Balance. Choose the specific purchase(s) you want to put into a plan, or select a portion of your statement balance.
Step 3.2: Choose Your Plan Duration. American Express will present you with various repayment terms, often 3, 6, or 12 months.
Step 3.3: Review the Fixed Monthly Fee. Instead of interest, Plan It charges a fixed monthly fee, which is clearly disclosed upfront. This means you know exactly what you'll pay each month.
Step 3.4: Confirm and Create. Once you select your preferred plan, review the details and confirm. Your monthly installment amount, including the fee, will be automatically added to your minimum payment due each month.
Sub-heading: Key Benefits of Plan It
Predictable Payments: The fixed monthly fee and set repayment term make budgeting easy.
No New Credit Check: Since it's built into your existing card, there's no additional credit check, making it a quick and convenient option.
Earn Rewards: You generally still earn rewards on the original purchase even when using Plan It to pay it off over time.
Flexibility: You can have multiple Plan It plans active simultaneously (typically up to 10).
Step 4: Considering Cash Advances (Use with Caution!)
While technically a way to "borrow" money, a cash advance from your American Express credit card is typically the least favorable option due to its high cost.
Sub-heading: Understanding the Costs and Drawbacks
Immediate Interest Accrual: Unlike purchases, interest on cash advances typically starts accruing immediately from the transaction date, with no grace period.
High Fees: American Express charges a cash advance fee, often a percentage of the amount withdrawn (e.g., 3% to 5%), with a minimum fee. This is on top of the interest.
Higher APR: Cash advances usually have a higher Annual Percentage Rate (APR) than regular purchases.
No Rewards: Cash advances do not typically earn Membership Rewards points or other card benefits.
Action: To get a cash advance, you would typically use your American Express credit card at an ATM or a bank. However, seriously consider other options first before resorting to a cash advance. It should be a last resort for urgent, small amounts of cash.
Step 5: Managing Your Borrowed Funds Responsibly
Regardless of the American Express borrowing option you choose, responsible management is key to maintaining a healthy financial standing.
Sub-heading: Repayment and Monitoring
Understand Your Payment Schedule: For personal loans, you'll have fixed monthly payments. For Plan It, the installment amount is added to your regular minimum payment.
Set Up Automatic Payments: This helps ensure you never miss a payment, which can incur late fees and negatively impact your credit score.
Monitor Your Account: Regularly check your American Express online account or the Amex app to track your loan or plan progress, view statements, and confirm payments.
Budgeting: Incorporate your loan or plan payments into your monthly budget to ensure you can comfortably meet your obligations.
Sub-heading: Impact on Your Credit Score
Personal Loans: Applying for a personal loan generally results in a soft credit inquiry (no impact), but accepting the loan will lead to a hard inquiry and the loan will be reported to credit bureaus. Consistent on-time payments can positively impact your credit score, while missed payments will negatively affect it.
Plan It: Since Plan It operates within your existing credit limit and does not involve a new credit check, it generally does not have a direct impact on your credit score beyond the initial credit card account itself. However, consistently meeting your payments on your overall Amex account, which includes Plan It installments, contributes to a positive credit history.
Cash Advances: Taking a cash advance itself doesn't directly impact your credit score, but the increased balance and high interest charges can lead to higher credit utilization, which can negatively affect your score if not managed promptly.
10 Related FAQ Questions
Here are 10 frequently asked questions about borrowing money from American Express, starting with "How to," along with quick answers:
How to check if I'm eligible for an American Express Personal Loan?
Quick Answer: Log in to your American Express online account or the Amex Mobile App and look for the "Borrowing Centre" or "Personal Loans" section to see if you have a pre-approved offer.
How to apply for an American Express Personal Loan?
Quick Answer: If you have a pre-approved offer, you can apply directly through your online account by selecting the offer, choosing your desired loan amount and terms, and providing the requested personal and financial information.
How to use American Express Plan It for a purchase?
Quick Answer: Log in to your American Express online account or app, find an eligible purchase ($100+) with the "Plan It" option, select it, choose your desired repayment term, and review the fixed monthly fee before confirming the plan.
How to know the interest rate or fees for an American Express Personal Loan?
Quick Answer: The Annual Percentage Rate (APR) and any applicable fees (like late fees) for a Personal Loan will be clearly disclosed in your pre-approved offer and the loan agreement before you accept.
How to cancel an American Express Plan It installment plan?
Quick Answer: You can typically cancel an active Plan It installment plan at any time through your American Express online account or app. Any remaining plan balance will return to your main account balance.
How to get cash from my American Express credit card?
Quick Answer: You can obtain a cash advance at an ATM or bank using your American Express credit card, but be aware of immediate interest accrual and high fees. It's generally not recommended for borrowing.
How to repay an American Express Personal Loan?
Quick Answer: Personal Loans have fixed monthly payments. You can typically make payments online through your Amex account, set up automatic payments, or pay by mail.
How to find out the maximum amount I can borrow from American Express?
Quick Answer: For Personal Loans, your pre-approved offer will display the maximum loan amount you're eligible for, which depends on your creditworthiness and other factors. For Plan It, it operates within your existing credit card limit (up to 85% of your credit limit can be put into plans).
How to contact American Express customer service about borrowing options?
Quick Answer: You can contact American Express customer service by calling the number on the back of your card, or by using their secure messaging or chat features available through your online account or mobile app.
How to consolidate American Express credit card debt with an Amex Personal Loan?
Quick Answer: An American Express Personal Loan cannot be used to pay down or consolidate balances on American Express-issued cards. It can only be used for eligible credit card balances issued by other U.S. banks.
