AmEx PlanIt

jwhite9185

AmEx have recently launched their buy now pay later feature in the UK.

I decided to give it a go on a £150 purchase to see what it was all about, and whether it would be any advantage to use. 

I'm struggling to really see the point if I'm being honest! Sure, you don't pay interest on the purchase, but you do pay a fee instead, which they say themselves is comparable to your interest rate. So no advantage there.

The amount that I put on the instalment plan wasn't credited back to my account. So no advantage there.

The only difference I have seen is that the £150 was knocked off my balance, which could be an advantage if you make a huge purchase and don't want your credit report to show your card is maxed out. 

I'd like to say that I've missed something here, but to be honest, I don't really see any advantage to using this opposed to just paying off your card normally. 

WillPS

I suppose it allows you to see the cost of your borrowing, in pounds and pence, upfront. I suspect it's something they'll 'enhance' once it's a bit more mature, but either way I doubt it'll be of much interest to me as a non-interest-paying credit card connoisseur!

Brie

I thought that the FCA was looking into all the BNPL schemes as being badly explained and thus catching out lots of people who don't get past the "buy now" bit and don't actually manage the "pay later" and get hit with the huge interest rates charged by many.  

daivid

My cynical view is it is Amex trying to tempt customers to stop paying in full, thus adding an income stream, the high APR of amex has always been added encouragement for customers to pay in full (over other major providers who's aprs may have been half of amex). Unless it’s a 0% spending card (which Amex doesn’t offer) the way to use a card is to pay in full each month. Planit is a 'less bad' option if you really can’t pay in full, cheaper than the standard apr and only incurring a fee for the amount put onto it rather than the entire balance of that month. 

TwiceNightly

The Plan It plan is knocked off your balance, like you say, but it's not knocked off your credit limit so it's effectively the same thing to the credit reference agencies.

The main advantage I see I guess is that it's so easy to work out what you'll be paying before activating the plan. This can be very confusing in my experience with doing the same on a standard credit card.

Example:
£300 purchase on Plan It. The 'fee' is 1.1% of that original £300 per month which is £3.30 and that fee is added to however many months you decide to split the payment into, so if it was 3 months then the monthly payment is £103.30

With Credit cards it's more complicated than that as the interest is calculated on your daily balance, which is different in month 2 than month 1

Desmond_Hume

These things - to me - honestly sound like a fast track to difficulty. I use a CC. To my advantage. These schemes don’t seem like an advantage to me.