Is Chase’s My Chase Payment Plan a Good Deal?
Last fall, in time for the 2020 holiday season, Chase introduced My Chase Plan, a flexible way for credit cardholders to pay for certain purchases over time with a fixed monthly fee instead of interest. As the 2021 holiday season approaches, here’s a look at what the bank calls a ‘buy now, pay later’ digital feature, along with some tips on how and when to consider using it.
Key points to remember
- My Chase Plan allows credit card users to create a separate payment plan for certain large purchases.
- The payment plan charges a fixed monthly fee instead of interest like most other card transactions.
- Even though you won’t be paying interest, there are still costs to keep in mind.
How does my chase plan work
My Chase Plan is a fixed payment plan that allows Chase credit cardholders to pay for certain purchases in installments rather than as part of their regular balance.
Similar to American Express’s Pay It, Plan It, My Chase Plan charges a fixed monthly fee instead of interest.
My Chase plan is available on purchases of $ 100 or more. Depending on the amount of the transaction, your creditworthiness and your account history, you may have three to 18 months to pay off the balance.
For example, let’s say you have a purchase of $ 689.85 that is eligible for My Chase Plan. Chase can offer you three payment options:
- Three installments of $ 232.18 with a monthly fee of $ 2.23.
- Six payments of $ 117.56 with a monthly charge of $ 2.58.
- Twelve payments of $ 60.59 with a monthly charge of $ 3.10.
Once you choose an option, you will continue to make your monthly credit card payment, and the My Chase Plan payment will be added to your minimum amount due.
One of the benefits of My Chase Plan is that you will continue to earn rewards on your purchases. Plus, if you want to pay off your balance earlier, there is no penalty. Finally, if you have a 0% APR introductory promotion on your account, there will be no monthly fee if you opt for My Chase Plan payments.
Is my chase plan worth it?
At first glance, My Chase Plan seems like it could save you money because the fixed monthly fees are pretty low. But keep in mind that the fees stay the same even if your balance goes down, unlike interest that would go down with the balance over time.
Before you decide to use My Chase Plan, run the numbers.
For example, let’s take the purchase of $ 689.85 above and use the 12 month plan. With this plan, the fixed monthly fee would cost you a total of $ 37.20.
Now let’s say your interest rate is 16.99%. If you were to pay off the balance over 12 months, you would end up paying $ 65.12 in interest, so My Chase Plan would save you money.
But if the scenario were different, with higher monthly fees or a longer repayment period, the cost of the fees could exceed the interest charges.
My Chase Plan could also be of use to anyone who is struggling to make more than the minimum payment on their credit card each month. With fixed monthly payments like an installment loan, you can’t delay paying off the balance.
That said, if you can afford to pay off your balance in full each month, it’s best to avoid any payment plan that costs you extra money, whether it’s interest or fees.