American Express Pay Over Time: How it works

American Express cardholders are loyal customers. Not only do they recognize the value offered by the American Express name, cardholders enjoy tremendous perks like extended warranties, travel protections and access to presale tickets to sporting events and concerts. These card benefits can justify a pricier annual fee.

American Express strives to be competitive in the credit card marketplace and continues to look for ways to add value for their cardholders.  Although American Express is widely known for its traditional charge card model – which is to pay in full when you receive a monthly statement – American Express also provides solutions for consumer and business card customers who need more flexibility, particularly as their financial needs shift during the COVID-19 pandemic.

What is Pay Over Time and how does it work?

For cardholders who want or need a bit more flexibility when structuring payments, Pay Over Time is a feature that lets eligible American Express cardholders carry a balance on eligible purchases of $100 or more.

There are specific purchases that are not eligible for Pay Over Time. These transactions include traveler’s checks, cash advances, fees owed to American Express and gambling-related transactions like casino charges.

For those who choose the Pay Over Time feature, applicable revolving balances are subject to accrued interest. In addition to more flexible payment terms, cardholders will continue to earn rewards on all eligible purchases; it does not matter whether the Pay Over Time feature is utilized.

Pay Over Time is a feature of American Express U.S. consumer and business Green, Gold and Platinum cards, and the feature allows eligible charges to be automatically added to a balance that a cardholder can opt to revolve with interest month-to-month, until that amount reaches their Pay Over Time limit.

In short, it’s an extended payment option for cardholders who may not want to pay a balance in full.

Which American Express cards offer Pay Over Time?

The program is offered for both consumer and business Green, Gold and Platinum cards. Here’s a quick look at what the consumer cards have to offer.

American Express® Green Card*

Annual fee: $150

Rewards rate: Cardholders earn 3X points at restaurants worldwide, including takeout and food delivery and 1X points on all other eligible purchases.

American Express® Gold Card

Annual fee: $250

Rewards rate:  Earn 4X points on restaurants, including takeout and delivery in the U.S. Earn 4X points at U.S. supermarkets (on up to $25,000 per calendar year in purchases, then 1X). Earn 3X points on flights booked directly with airlines or on American Express Travel. Earn 1X points on all other purchases.

The Platinum Card® from American Express

Annual fee:  $695

Rewards rate: Earn 5X points on airfare booked directly with airlines or through American Express Travel. Starting January 1, 2021, earn 5X points on up to $500,000 on these purchases per calendar year. Earn 5X points on prepaid hotel bookings through American Express Travel and 1X points on all other purchases.

How to take advantage of Pay Over Time

For consumer cards, when Pay Over Time is set to “on” (cardholders can turn this feature on and off in the mobile app or via their online account), purchases $100 or more ($0 on Green) are automatically added to their Pay Over Time balance that revolves with interest month-to-month, up to their Pay Over Time limit.

For Business cardholders, Pay Over Time will be added at the start of the November billing cycle – there is nothing these users need to do to activate the feature. Pay Over Time provides business owners the option to carry a balance with interest on eligible purchases of $100 or more or to pay the balance in full.

It’s also important to note that both business and consumer cardholders will be unable to add a charge to a Pay Over Time balance if the transaction will exceed their set Pay Over Time limit. Cardholders can find their Pay Over Time limit in their app or cardholder dashboard.

Understanding when interest is charged

When using the Pay Over Time feature, cardholders use their American Express cards as they normally would. If the cardholder pays the entire balance in full at the end of the billing cycle, no interest is charged, and the card continues to function similarly to a charge card.

If you do carry a balance, however, your payments and interest charges will be dependent on your Pay Over Time terms.

Payment deadlines are outlined on your American Express dashboard, found on both the mobile app or online portal. (Note, if you need some flexibility on your monthly due date, American Express might allow you to change it.)

Your interest rate is determined by your creditworthiness. Current rates range from 16.74% to 23.74% variable.

Like a traditional credit card, Pay Over Time allows cardholders to pay just a monthly minimum and carry the rest of their balance (up to their Pay Over Time limit), the full balance or anything in between.

How Pay Over Time affects your credit score

Pay Over Time won’t affect your credit – and more particularly your credit utilization ratio – the way a traditional credit card does. Your credit utilization ratio is the amount you currently owe divided by your credit limit, but this is dependent on your card issuer reporting your available credit limit to major credit bureaus. Since Pay Over Time isn’t technically a credit limit, it does not show up on your credit report.

Pay Over Time vs. traditional revolving credit

The Pay Over Time feature can make your charge card function more like a traditional credit. With charge cards, consumers or businesses are not able to carry a balance; your amount due on your monthly statement must be paid in full.

The difference with Pay Over Time is that it permits cardholders to finance eligible purchases beyond the month with interest.

Yet, Pay Over Time differs from a typical credit card you may have in your wallet. Notably, Pay Over Time enables you to toggle the feature on and off.

Additionally, your qualifying American Express card has no preset spending limit, while your Pay Over Time limit does resemble a traditional revolving credit limit. In effect, you can charge what you want on your American Express card and decide when and how to pay off the amount you owe. (Note, though you don’t have a hard credit limit, American Express won’t approve unlimited spending.)

Pay Over Time vs. Pay It Plan It

Beyond Pay Over Time, there are other features that American Express offers to help customers manage their finances. The Pay It Plan It feature, for instance, can be used in tandem with Pay Over Time.

Pay It Plan It helps cardholders pay off qualifying purchases over time with fixed monthly payments, for a fixed fee. No enrollment is required, although account history and credit history are evaluated. If there’s a history of missed or late payments, American Express might not grant this feature.

The “Pay it” portion of Pay It Plan It lets cardholders tap the American Express app to quickly pay for small purchase amounts, under $100, throughout the month.

”Plan it,” on the other hand, lets consumer cardholders split up qualifying large purchases of $100 or more into equal monthly payments for a fixed fee.

Bottom line

American Express offers cardholders the flexibility to decide how to pay their bill. If you are cash-strapped during a particular month, the Pay Over Time feature allows you to carry a balance on purchases.

Regardless of the flexibility, American Express offers, though, it’s important to continue your diligent payment habits, especially making minimum payments on time.

*All information about the American Express Green Card has been collected independently by CreditCards.com and has not been reviewed by the issuer. This offer is no longer available on our site.