Ready to take control of your large purchases and make them more manageable? American Express's "Plan It" feature could be exactly what you need! It's a fantastic tool that offers flexibility beyond traditional credit card payments. Let's dive deep into how it works, step by step, so you can decide if it's the right financial move for you.
Understanding American Express "Plan It"
"Plan It" is a unique feature offered by American Express on many of its eligible credit cards. Instead of accruing variable interest on large purchases, it allows you to split qualifying transactions into fixed monthly installments with a fixed monthly fee. This means you know exactly how much you'll pay each month, removing the guesswork and potential for escalating interest charges that come with carrying a traditional credit card balance.
It's essentially a "buy now, pay later" option built right into your existing Amex credit card, providing a structured repayment plan for those bigger expenses that might otherwise strain your budget if paid in one go.
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| How Does American Express Plan It Work |
Step 1: Discovering Your Eligibility & Identifying Eligible Purchases
The very first thing you need to do is confirm if your American Express card is eligible for the "Plan It" feature. Not all cards or card members qualify, and eligibility can change over time based on your account status, creditworthiness, and card type.
How to Check Your Eligibility:
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Log In Online: The easiest way to check is by logging into your American Express online account. Look for sections related to "Payments," "Services," or "Plan It" directly.
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Amex Mobile App: The American Express mobile app is also a great resource. Eligible purchases will often have a "Plan It" icon next to them. You can usually find a dedicated "Plan It" section within the app as well.
What Purchases are Eligible?
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Minimum Amount: Generally, individual purchases of $100 or more are eligible for "Plan It." However, in some cases, you might be able to combine multiple smaller eligible purchases to meet the minimum threshold if done through your online account (not usually available in the app for combining).
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Purchase Transactions Only: "Plan It" is typically for purchase transactions only. This means you generally cannot use it for cash advances, balance transfers (unless specifically offered as a promotion), or other fees and charges like annual membership fees.
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Exclusions: Purchases subject to foreign transaction fees or any fees owed directly to American Express (like late payment fees) are usually not eligible.
Once you've confirmed your eligibility and identified a qualifying purchase, you're ready for the next step!
Step 2: Creating Your "Plan It" Plan
Once you've found an eligible purchase or amount you wish to split, creating a "Plan It" plan is a straightforward process.
Sub-heading: Via American Express Online Account
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Navigate to "Plan It": After logging into your American Express online account, look for the "Plan It" section. It might be under "Payments," "Account Services," or a dedicated tab.
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Select Purchases or Amount: You'll see a list of eligible purchases. You can either select a single purchase of $100 or more, or, in some cases, you may be able to combine up to 10 eligible purchases that collectively meet the minimum amount (e.g., $100 or more).
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Choose Your Plan Duration: American Express will present you with several repayment options, usually ranging from 3, 6, 9, or 12 months, though longer options like 24 months might be available depending on your account and the purchase. Each option will clearly display:
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The monthly principal payment.
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The fixed monthly plan fee.
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The total monthly payment (principal + fee).
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Review and Confirm: Carefully review the details of the plan you've chosen. This includes the total amount to be repaid, the monthly payments, and the total plan fees over the duration. Once you're satisfied, confirm your selection.
Tip: Review key points when done.
Sub-heading: Via American Express Mobile App
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Open the App and Select Purchase: Log into your Amex mobile app. Browse your recent transactions. Eligible purchases will have a "Plan It" icon or option next to them.
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Tap "Plan It": Tap on the "Plan It" option for the desired purchase.
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Select Duration and Review: Similar to the online process, you'll be presented with various plan durations and their associated monthly payments and fees. Choose the one that best suits your needs.
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Confirm: Review the plan details and confirm.
It's important to note that while the mobile app is convenient, the online platform might offer more flexibility, such as combining multiple purchases into a single plan.
Step 3: Understanding the Cost: Fees vs. Interest
This is where "Plan It" significantly differs from standard credit card debt. Instead of a variable Annual Percentage Rate (APR) that can fluctuate and lead to unpredictable interest charges, "Plan It" uses a fixed monthly plan fee.
The "Plan It" Fee:
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Fixed and Upfront: When you create a plan, the monthly fee is clearly displayed upfront for each plan duration option. You'll know exactly how much you're paying each month for the privilege of spreading out your payments.
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In Lieu of Interest: This fee is charged instead of the regular interest that would accrue on that specific purchase if you carried a balance on your card. The goal is to provide a more predictable and potentially lower-cost way to pay off large expenses compared to high credit card APRs.
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Varies by Plan: The monthly plan fee can vary based on several factors:
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The purchase amount.
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The plan duration you select (longer plans typically have higher total fees, though lower monthly fees).
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Your account history and creditworthiness.
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Promotional offers: American Express sometimes offers promotional 0% plan fees for a limited time on certain cards or purchases, which can be a fantastic deal!
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Comparing to Traditional Credit Card Interest:
Consider a $1,000 purchase:
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Traditional Credit Card (20% APR): If you only pay the minimum and carry a balance, the interest can compound, and the total cost could significantly exceed the original $1,000. The repayment period would be unclear without a fixed plan.
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"Plan It" (e.g., 0.8% monthly plan fee for 12 months): You'd pay $8 each month as a plan fee, plus roughly $83.33 of the principal ($1000/12). Your total cost for the plan would be $1,000 + ($8 * 12) = $1,096. You know precisely when you'll be debt-free from that purchase.
While there is a cost associated with "Plan It," its transparency and predictability can be a significant advantage for budgeting.
Step 4: Managing Your "Plan It" Payments & Account Impact
Once your "Plan It" is active, managing it is relatively simple, as the payments are integrated into your regular Amex statement.
Integration with Your Minimum Payment Due:
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The monthly "Plan It" payment (which includes a portion of the principal and the fixed monthly fee) will be automatically included in your overall Minimum Payment Due each month on your American Express statement.
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You don't need to make a separate payment for your "Plan It" installment; it's all part of your regular bill.
Impact on Your Available Credit:
Tip: Look for examples to make points easier to grasp.
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When you set up a "Plan It," the full original purchase amount (or the total amount you chose to plan) will be deducted from your available credit limit. This is because American Express considers that amount to be "used" even though you're paying it off over time.
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As you make your monthly "Plan It" payments, the principal portion you pay down will gradually restore your available credit.
Early Repayment:
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One of the great benefits of "Plan It" is that there's typically no penalty for paying off your plan early! If you come into extra funds, you can pay down the entire outstanding "Plan It" balance at any time, potentially saving on future monthly plan fees.
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You can do this by paying off your entire statement balance or specifically targeting the "Plan It" balance within your online account or app.
Important Considerations:
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On-time Payments are Crucial: Just like any credit card, missing payments on your "Plan It" will likely result in late fees and could lead to the cancellation of your plan. If a plan is canceled due to missed payments, the remaining balance will revert to your standard credit card APR, which could be much higher than your fixed plan fee.
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Multiple Plans: You can usually have multiple "Plan It" plans active simultaneously, typically up to 10 plans at a time. This allows you to manage different large purchases separately.
Step 5: "Pay It" – A Complementary Feature (Where Available)
While the primary focus is "Plan It," it's worth briefly mentioning "Pay It," which is often grouped with "Plan It" as part of American Express's flexible payment options.
What is "Pay It"?
"Pay It" allows you to make small payments on individual purchases under $100 throughout your billing cycle. It's designed to help you proactively manage your balance and reduce your overall outstanding amount before your statement even closes.
How it Works:
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In your Amex app or online account, you'll see a "Pay It" icon next to eligible smaller purchases.
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You can simply tap or click it to pay off that specific small purchase immediately.
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These payments instantly reduce your running balance and count towards your eventual minimum payment due.
While "Pay It" is great for daily financial hygiene, "Plan It" is the feature specifically designed for spreading out larger expenses over time.
The Benefits of American Express "Plan It" ✨
"Plan It" offers several compelling advantages for eligible card members:
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Predictable Payments: You know exactly how much you'll pay each month, making budgeting significantly easier. No more surprises from fluctuating interest rates.
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Avoid Variable Interest: Instead of a potentially high and unpredictable APR, you pay a fixed, upfront monthly fee. For many, this can result in lower overall costs compared to carrying a traditional credit card balance.
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Financial Control: It empowers you to manage large expenses without depleting your savings or taking on high-interest debt immediately.
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No New Credit Application: Since it's a feature of your existing Amex card, there's no separate application or credit check required to create a plan.
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Earn Rewards: You continue to earn rewards (like Membership Rewards points or cashback) on the original purchase amount, even as you pay it off over time.
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Flexibility: You can choose a repayment duration that suits your financial situation.
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Early Payoff Option: The ability to pay off your plan early without penalty gives you even more control.
Potential Drawbacks and When to Consider Alternatives ⚖️
QuickTip: Look for contrasts — they reveal insights.
While "Plan It" is a valuable tool, it's not always the perfect solution for everyone or every situation.
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Still a Cost: Although it's a fixed fee, it's still an additional cost on top of your original purchase. If you can pay off your entire balance in full each month, that's always the most cost-effective option as it incurs no fees or interest.
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Ties Up Credit: The full planned amount is held against your credit limit, which might impact your available credit for other purchases if you have many active plans or a lower credit limit.
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Not Always Cheaper than 0% APR: If you qualify for a credit card with a 0% introductory APR offer for new purchases, that would be a completely free way to pay off a large purchase over the introductory period, making it a potentially better option than "Plan It" with its associated fees.
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Limited Eligibility: Not all American Express cards or cardholders are eligible for "Plan It," and eligibility criteria can be strict.
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No New Money: "Plan It" uses your existing credit limit; it's not a new line of credit.
Conclusion
American Express "Plan It" is a sophisticated and highly useful feature for managing significant expenditures. It transforms a potentially daunting lump sum into manageable, predictable monthly payments with a transparent fee structure. By understanding how it works, its benefits, and its limitations, you can leverage "Plan It" to gain greater financial control and make those larger purchases fit comfortably into your budget. Always remember to assess your own financial situation and compare "Plan It" to other available financing options to ensure you're making the most informed decision.
10 FAQ Questions About American Express "Plan It"
How to Check if My Amex Card is Eligible for Plan It?
You can check your eligibility by logging into your American Express online account or the Amex mobile app. Look for the "Plan It" section or a "Plan It" icon next to recent transactions.
How to Create a Plan It for a Purchase?
Log in to your Amex online account or app, select an eligible purchase (usually $100 or more), choose your desired repayment duration (e.g., 3, 6, or 12 months), review the monthly payments and fixed fees, and then confirm.
How to Know the Fees Associated with Plan It?
When you go to create a "Plan It" plan, American Express will clearly display the fixed monthly plan fee for each available repayment duration before you confirm the plan. This fee is in lieu of interest.
How to Pay Off a Plan It Early?
You can pay off a "Plan It" plan early without penalty by making an additional payment that covers the remaining principal balance of the plan. This can usually be done by paying off your entire statement balance or by selecting the specific plan within your online account or app.
QuickTip: Scan quickly, then go deeper where needed.
How to See My Active Plan It Plans?
All your active "Plan It" plans, their remaining balances, and upcoming payments are visible within your American Express online account and the Amex mobile app in the "Plan It" section.
How to Combine Multiple Purchases into One Plan It?
While you can typically combine up to 10 eligible purchases into a single "Plan It" plan, this feature is usually only available through your American Express online account, not the mobile app.
How to Determine if Plan It is Better Than Carrying a Balance?
"Plan It" is generally better than carrying a balance at your card's standard variable APR because it offers a fixed monthly fee and predictable payments. However, a 0% introductory APR offer on a new card would be even better as it incurs no fees or interest during the promotional period.
How to Cancel a Plan It?
Once a "Plan It" is active, it generally cannot be "canceled" in the traditional sense. You can, however, pay off the remaining balance early without penalty, which effectively closes the plan. If you fail to make minimum payments, American Express may cancel the plan, and the remaining balance will revert to your card's standard APR.
How to Earn Rewards with Plan It?
You earn rewards on the original purchase amount when you make the transaction, regardless of whether you use "Plan It" to spread out the payments. As long as you make your minimum payments on time, your rewards earnings are unaffected.
How to Use Pay It (the complementary feature)?
"Pay It" allows you to make payments on individual purchases under $100 throughout your billing cycle. In the Amex mobile app or online, simply look for the "Pay It" icon next to eligible smaller transactions and tap to pay them off instantly, reducing your running balance.
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