American Express has added an alternative payment option for its credit card customers, allowing them to pay for large purchases in monthly instalments at zero interest.The interest-free instalment option, called Pay Your Way, is having its global launch in Australia. It is only available to customers with Amex cards issued directly by American Express (not big bank companion cards).Customers have to select a purchase amount (the minimum is $300) and select a term of three, six or 12 months. For the next six months purchases equal to or above the chosen purchase amount will be automatically converted into instalment plans.Customers can use the plan to make purchases up to 85 per cent of their credit limit. There is an establishment fee for each plan: two per cent of the purchase price for a three-month plan; three per cent of the purchase price for a six-month plan; and four per cent of the purchase price for a 12-month plan.Citibank made a similar move in May when it introduced a fixed payment option that allows credit card customers to convert part of their revolving balance to a term payment arrangement at a lower rate. Customers have the choice of making an individual transaction using the fixed payment option or converting part of their balance. Terms are for six, 12 or 24 months and repayments are structured as standard principal and interest loans.The interest rate starts at 12.99 per cent and may be lower, based on an assessment of the account. The rate for revolving credit on Citi's popular Citi Platinum card is 20.99 per cent. There is no cost to set up the facility.These developments come at a time when the Government is calling for credit card issuers to provide consumers with alternative payment tools. The Treasurer released a consultation paper in May, outlining a proposed set of reforms to the credit card market. These include tighter responsible lending obligations, a ban on unsolicited credit limit increase offers, a change to the way interest is charged on balances and improved disclosure on costs.Another proposal is that card issuers would have to contact consumer who persistently make small payments and offer an alternative payment method, such as a repayment plan over a selected period of time.