Here’s something new in the credit card market …
A new innovation in the credit card market is low interest deals for big purchases. The credit card holder nominates a big purchase, or a number of past purchases made on their credit card, and agrees to set repayments over an agreed term to get a lower interest rate. It’s like a personal loan operating inside your credit card account. Citibank and Virgin Money have already deals like this.
Now American Express has gone even further. In a world first for Australia, American Express has launched a zero per cent option for Amex credit card customers. Amex credit card customers can now apply for an alternative payment option for large purchases made on their credit card called Pay Your Way.
The good news is that the American Express Pay Your Way deal charges zero interest. Pay Your Way is only available to customers with Amex cards issued directly by American Express, like the Amex Essentials Credit Card not companion Amex credit cards issued by other banks.
How does American Express Pay Your Way work?
American Express credit card customers can select a purchase amount of $300 or above and select a repayment term of three, six or 12 months. Over the next six months all purchases made by the cardholder that are over the chosen purchase amount are automatically converted to Pay Your Way instalment plans.
Customers can use Pay Your Way instalment plans for purchases that add up to as much as 85 per cent of their total credit limit.
What’s the catch with Amex Pay Your Way?
American Express Pay Your Way has an establishment fee for each plan. The fee is equal to two per cent of the purchase price for a three-month plan, three per cent for a six-months and four per cent for a 12-month Pay Your Way plan.