American Express has entered the buy now pay later market in Australia, launching a product called Plan It Instalments, which provides for repayment of balances in monthly instalments at zero interest.

Amex’s pitch is that consumers can have longer payment terms and bigger balances with Plan It Instalments than they can with other BNPL products.

Amex customer can pay off a portion of their balance by instalment, with a choice of three, six and 12-monthly plans. The amount to be paid off by instalment must consist of new purchases from the most recent statement.

The minimum amount that can be paid by instalment is A$150, while there is no maximum.

While there is no interest cost, Plan It comes with a monthly fee. The amount of fees increases with the balance being repaid on instalment.

A calculator on the Amex website shows that $1000 being repaid over three months would cost $7.30 a month in fees, while $5000 being repaid over six months would cost $36.50 a month in fees.

The fees on these examples work out to the equivalent of an annualised interest rate of about 8.7 per cent. Comparison site Canstar reports that the average intertest rate on Amex personal credit cards is around 19 per cent.

Balances being paid on instalment plans are counted within the consumer’s existing credit limit.

Plan It Instalments is designed for customers with Amex personal credit cards. David Jones credit and store cards, Amex Co corporate, small business and charge cards are not eligible.