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Should You Use a Credit Card Installment Plan?

Credit card installment plans let you skip credit card interest in favor of set plan fees.

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At some point, most of us will need to make a big purchase that we don’t have the cash for. While putting it on a credit card may be convenient, carrying a balance can become incredibly expensive in a hurry. Buy now, pay later plans have become a popular alternative for spreading out payments on a purchase without paying credit card interest, but they lack some of the benefits and protections that credit cards offer.

Some credit card issuers offer another option: credit card installment plans. The plans allow users to pay off eligible purchases with a fixed monthly payment, set fees and payment timelines, ranging from three to 48 months, depending on the issuer. These plans can potentially help you save money when paying off large purchases, but there are downsides. We’ll help you figure out if these plans are a smart choice for your next big purchase.

What is a credit card installment plan?

Credit card installment plans may look similar to buy now, pay later plans like Affirm, Afterpay and Klarna, but they are offered by credit card issuers. With a credit card installment plan, users select an eligible purchase (or several purchases) charged to their card, commit to monthly installments to repay the eligible balance and pay a set plan fee. 

As opposed to BNPL plans, you don’t have to apply for credit card installment plans -- if your card issuer offers the plan and you’re eligible, you’ll have the option to choose which purchases you want to put on an installment plan. You’ll then pay the amount based on the plan you select, plus any payments and fees due for the rest of your credit card balance. 

Which credit cards offer installment plans?

Quite a few companies offer credit card installment plans with varying terms. Credit card issuers typically base their offer for a monthly plan fee on a number of factors, such as the purchase amount, your account history and your creditworthiness. Here’s how some card issuers’ plans compare:

Amex Plan ItCiti Flex PayMy Chase PlanU.S. Bank ExtendPay® PlanPrime Visa’s equal monthly payments option
Minimum eligible purchase$100$75$100$100$50
Repayment terms3 to 12 monthsVaries3 to 24 months3 to 24 months6 to 12 months
Monthly costFixed feeAccrued interest*Fixed feeFixed feeNone**
As of Nov. 14, 2023

*Charges on the Citi Flex Pay accrue interest, and the plan’s APR may be the same as your regular APR. The plan offers a fixed monthly payment based on your purchase price plus interest for that plan’s period.

**Prime Visa users can choose an interest-free financing plan on their Amazon purchases rather than earning 5% cash back.

Pros and cons of using a credit card installment plan

While credit card installment plans may be convenient to use, there are some drawbacks to consider, too:


  • Monthly payments are set amounts you can budget for.

  • Fixed plan fees may be more affordable than variable interest rates over time.

  • You can earn rewards within your credit card’s program.

  • No application is required.

  • Credit cards may offer purchase protection plans and other benefits.


  • Fees for these plans apply.

  • Reduces the available credit on your credit card.

  • Potentially makes it easy to overspend.

  • Multiple plans can increase your monthly credit card payment.

Should you use a credit card installment plan?

Using a credit card installment plan can make spreading out payments more convenient and potentially save you money, if used responsibly. If you’re torn between a credit card installment plan and a BNPL plan (or another option), here are some questions to ask yourself.

How much will you pay each month?

If you prefer to budget the same amount each month to pay off a purchase, a credit card installment plan offers a set payment schedule -- similar to a BNPL plan. You can select a monthly amount and repayment timeline rather than trying to figure out how much to pay as your purchase amount continues to accrue interest.

Do you want to avoid an application process?

Installment plans share some similarities with personal loans and BNPL plans, letting you charge large purchases that you pay off with predetermined monthly payments. However, unlike personal loans, you don’t have to apply, which can save you time and lets you avoid a hard credit inquiry that can ding your credit score. And unlike BNPL plans, you don’t have to wait for approval since the purchase is already on your credit card.

Do you want to earn credit card rewards?

Credit card installment plans typically let users earn rewards on their purchases with their credit card as they normally would. This gives credit card installment plans an edge when compared to other borrowing options that don’t offer rewards for spending.

Which will save you more money?

For larger purchases, paying the installment plan’s monthly fee may be less expensive than paying credit card interest -- the average credit card APR is currently over 20%, according to CNET sister site Bankrate. The savings could be even greater if you’d only make the minimum monthly payment on your balance each month. A BNPL plan could potentially save you the most money since it can offer 0% interest on a purchase without the monthly fees -- so long as you can pay off the full purchase amount within the plan’s timeline, typically about four to six weeks.

How much credit do you have available?

Before using a credit card installment plan, you should make sure you have enough available credit -- you can’t charge a purchase that exceeds your available credit. Also, putting a large purchase on a card will increase your credit utilization, the amount you owe relative to your available credit. Credit utilization is one of the biggest contributors to your credit score, so factor that in when deciding whether you should use the installment plan. If you don’t have the available credit -- or don’t want to increase your credit utilization -- a BNPL plan might be the better option. 

How do you use a credit card installment plan for a purchase?

If you decide to use an installment plan, you can typically make the purchase as normal and then log in to your account. You’ll be presented with one or more options for repayment terms and monthly payments.  

You’ll also see the monthly fees associated with each plan. If you selected a six-month payment plan for a $1,200 purchase, for instance, you’d pay the $200 installment plus a percentage of the purchase amount. If the fees worked out to 1.72% of the purchase amount, for example, you’d pay a total of $20.64 in fees over the life of the plan, which would make your monthly payment $203.44 

How do you pay a credit card installment plan?

The monthly charge for a credit card installment plan is automatically added to your monthly minimum credit card payment , plus any interest charges on the balance if you’re carrying debt from one month to the next. So you’ll only need to make one payment to your credit card issuer each month, but it could be a substantially larger amount if you’re currently only making minimum payments on your card.

Alternatives to credit card installment plans

If you like the idea of financing large purchases with a set monthly payment and potentially saving money, consider these alternative options to credit card installment plans.

Buy now, pay later services

BNPL services typically let you finance a purchase at the point of sale, then pay off the purchase with a set monthly payment over time. Some BNPL have minimum purchases as low as $10.

These plans tend to have short repayment periods overall -- some only a few weeks -- and may offer 0% interest as long as you make your payments on time.  If a BNPL plan does charge interest, it’s typically simple interest, which means you only pay interest on the amount you borrow. Credit card interest, on the other hand, is compound interest, meaning you accrue interest on the principal as well as any unpaid interest you’ve acquired. 

Although you have to get approved, most BNPL plans do not pull your credit, so the process is typically quick. But this quick approval process has a downside: It makes BNPL plans relatively easy to obtain, which can quickly lead to overspending. And, even if used responsibly, your on-time BNPL payments won’t help you build credit. 


Layaway is kind of like BNPL or credit card installment plans, but with a big difference: Instead of receiving the merchandise first and dealing with the financial consequences later, you only get the merchandise after you’ve fully paid for it. 

Few retailers offer layaway plans, but one that does is Amazon. With Amazon Layaway, you can reserve an item until it’s paid off, then Amazon ships it to you. If you miss payments, Amazon will cancel your layaway plan and refund the money you’ve paid so far. And Amazon Layaway doesn’t require a credit check, so it won’t hurt your credit score.

0% APR 

Some credit cards have 0% intro APR offers that apply to purchases, balance transfers or both for a limited time (usually nine to 21 months). Cards that have 0% APR offers for purchases let users charge up to their credit limit and pay down their balance without incurring interest during the introductory period.

Users can also potentially earn rewards for spending with their cards, and they can pay any amount they want on their credit card over the minimum monthly payment. However, you’ll still need to apply for a card with a 0% APR offer, which could affect your credit score, and there’s no guarantee you’ll be approved.

Personal loan

Personal loans allow users to borrow a set amount upfront, then repay their balance with a fixed interest rate, a fixed monthly payment and a set repayment schedule. Interest rates for personal loans tend to be lower than the average variable credit card APR, which can make personal loans attractive for long-term financing.

Personal loans require an application and typically come with fees, which may include origination fees, loan application fees, prepayment penalties or rejected payment fees. Also, lenders’ loan disbursement timelines vary, so pay attention if you need your funds quickly.

The bottom line

Credit card installment plans can be useful if you’re making a large purchase and need more time to pay off your balance. Over time, the set plan fees can potentially save you money compared to paying off a credit card balance with variable interest rates.


That said, the best course of action consumers can take is paying off their balance in full each month and not carrying debt from one month to the next. While credit card installment plans can be a good deal, they still make it easy to overspend.


In most scenarios, your plan will remain active if you miss a payment. With My Chase Plan, for example, the past-due plan amount will be added to the minimum amount due on the next month’s credit card bill. However, you typically cannot cancel a plan once you enroll.

You can pay off credit card installment plans early if you prefer, and there are no penalties for doing so. You’ll also avoid paying monthly plan fees for additional months if you pay your credit card installment balance in full early, before the plan’s end date.

Most issuers allow you to use multiple credit card installment plans for purchases -- check with your card issuer for your plan’s maximum. You’ll pay fees for each plan, but you’ll make one monthly payment that includes all your installment plan payments, your minimum payment and any finance charges or late payment fees. Be aware that creating multiple installment payments will likely cause your monthly credit card payment to increase significantly.

The editorial content on this page is based solely on objective, independent assessments by our writers and is not influenced by advertising or partnerships. It has not been provided or commissioned by any third party. However, we may receive compensation when you click on links to products or services offered by our partners.

Holly Johnson is a credit card expert and writer who covers rewards and loyalty programs, budgeting, and all things personal finance. In addition to writing for publications like Bankrate,, Forbes Advisor and Investopedia, Johnson owns Club Thrifty and is the co-author of "Zero Down Your Debt: Reclaim Your Income and Build a Life You'll Love."
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