Credit Card Companies Take Cue From Start-Ups to Offer Flexible Payment Plans

In February, JPMorgan Chase announced plans to offer new, flexible options to Chase cardholders. According to a transcript on the bank’s website, the options will include a “fee based” payment plan, designed to allow cardholders to pay off purchases between $500 and $1,300 — such as a television or a refrigerator — in installments, for a monthly fee. Chase also said it planned to offer a loan option, for larger purchases like a kitchen remodel, that would allow cardholders to borrow against unused credit on the card and pay it back in fixed amounts at a “competitive” interest rate.

Chase said the loan option was expected to be available later this year, while the installment option was scheduled for introduction in early 2020.

Here are some questions and answers about flexible card payment options:

Can I earn rewards or cash back on card purchases I pay off over time?

That varies by card and by the financing format chosen, so read the fine print. American Express said customers earned rewards points on purchases paid off in installments. Citi said its flex loans weren’t eligible for rewards points or cash back.

Will I need to pass a credit check to obtain a flexible payment option?

A selling point of the flexible payment plans and loans in general, according to the card companies, is that a new credit check isn’t required to gain approval to spread out payments or borrow against the card.

Are there other ways to manage my card balance?

If you have good credit and you’re able to plan ahead, applying for a credit card with a zero-percent balance transfer offer might make more sense for paying off a big purchase over time, said Sara Rathner, credit card expert at financial website Nerdwallet. Many cards, however, charge fees of 3 to 5 percent of the amount being transferred, so be sure to consider that cost when comparing options.

It’s also possible to pay off card purchases without waiting for your billing statement to arrive. You can do this with most cards by going online and making a payment. American Express — in a nod to customers who want to avoid “statement shock” at the end of the month — said its Pay It option let customers use their credit card as if it were a debit card, by paying for purchases via its mobile app as soon as they post to the account.

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