Smart Buying

New Buy Now, Pay Later Options

If you’ve been considering a BNPL plan, make sure the credit card in your wallet doesn't already have you covered.

We wrote about firms that let you pay for your purchases on an installment plan in The Hazards of Buy Now, Pay Later). Since then, the buy-now, pay-later (BNPL) trend has picked up momentum. Square Inc., the owner of peer-to-peer service Cash App, announced that it will acquire Afterpay; Amazon unveiled a new partnership with Affirm; and Capital One is beta testing its own BNPL platform.

But if you’ve been thinking about using a BNPL plan, note that the credit card in your wallet may already have you covered. Most holders of Chase and American Express consumer credit cards have access to a BNPL platform as part of their card’s features. (To see whether your card has this feature, look up your card agreement online or call the toll-free number on the back of your card.)

How it works. With platforms such as Affirm or Afterpay, you’re asked to choose an installment plan at checkout. But you can elect to use Pay It Plan It by American Express or the My Chase Plan after you’ve made your purchase. A purchase must be $100 or more to qualify, and your account can have up to 10 active BNPL plans.

Say you spent a little over $300 at one store using your American Express card. Log in to your account and search for “Create a Plan.” Select the transaction and choose one of three plan durations (the plan can be as short as two or three billing cycles). The fee is calculated on factors including the plan duration, the purchase amount, your interest rate and your credit rating. For a $330 purchase with a three-month plan duration, you could expect to pay a total fee of a little over $7. The My Chase Plan works more or less the same way.

The boon to consumers is that if you’ve been carrying a balance, this portion is not subject to your card’s regular interest charges. Plus, splitting an unexpectedly large payment could make it more manageable, says credit expert Gerri Detweiler. However, your installment amount, including the fee, is added to your card’s minimum payment amount.

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