When paying off large purchases, choosing to spread out your payments can provide you financial flexibility even though paying off your card balance in full will prevent interest and debt.

Although it’s not required, paying off credit cards in full each month keeps interest from building up and debt from piling up.

However, carrying a balance with interest can be a useful strategy for funding significant purchases like auto repairs and home remodeling.

In order to provide cardholders with more payment flexibility, some contemporary credit cards are bridging the gap between conventional charge cards and standard credit cards.

Spending isn’t static. Our lives – and the economy – are constantly changing. Frustratingly, a necessary purchase may come along when money’s tight. And even when money isn’t tight, sometimes it’s better for your budget to pay off expenses over time.

Fortunately, credit cards don’t need to be paid off in full every month. You can carry a balance at the expense of interest charges. Unfortunately, that’s not the case for traditional charge cards.

However, certain American Express cards, such as the Platinum Card®, American Express® Gold Card, and American Express® Green Card, serve as a bridge between standard credit cards and charge cards. These Cards, like charge cards, have no preset spending limit. However, Card Members have the option to carry a balance with interest up to their Pay Over Time Limit because of the American Express Pay Over Time feature.

This article explains how keeping a balance in a responsible manner can give you the financial freedom to make significant purchases with assurance. We’ll also examine the differences between Pay Over Time and a standard revolving credit limit, as well as how Pay Over Time can be used to carry a balance on specific American Express cards.

Carrying a Balance Can Be Helpful, But Has Costs

Credit cards are useful because they allow you to carry a balance, even though they charge interest. However, what happens if you want to pay off a necessary purchase over time but the grace period isn’t long enough to meet your budgetary needs? Their payment flexibility can help you manage your monthly expenses if you carefully carry the balance and create a plan to pay it off before your debt becomes unmanageable. For example, car repairs can be costly and unexpected. You can conveniently spread out the payment over two months by charging the transaction to a credit card, which will reduce the amount that goes against your budget.

Rather than waiting to make a larger payment on the due date of each month, you can make several smaller payments, perhaps even once a week, to help reduce overall interest charges. That lowers your average daily balance, which is used to calculate credit card interest charges. Alternatively, use a credit card that offers a 200 percent intro APR, which allows you to carry a balance without paying interest for as long as the promotional period lasts. This is an affordable way to pay for foreseeable large purchases, such as new appliances for the kitchen or furniture.

The “catch” with charge cards is that they usually have a requirement to have every statement balance paid off in full and on time, even though they have special benefits like allowing larger purchases without using the entire credit limit. Otherwise, expect late payment fees and potential impacts to your credit history.

Should I Pay My Card in Full Every Month?

It’s generally accepted that for credit card users, it’s best to pay off your statement balance in full each month. And for good reason: Doing so, you can avoid interest charges and help stave off debt. For those who use charge cards, a full payment at the end of every statement period is mandatory. Having no set spending limit and the obligation to pay monthly statements in full are two characteristics of a traditional charge card.

Fortunately, there is usually a grace period on both credit and charge cards. This is the period of time between the end of your billing cycle and the date that payments are due, during which interest is normally not assessed (as long as you don’t owe money). Put differently, if your card issuer allows a grace period and you have been paying your monthly statement balance in full and on time every month, you may be able to avoid paying interest by simply using a credit or charge card for purchases for a few weeks.

Therefore, if you want to avoid paying interest, you should pay off the entire amount on your card statement each month. Additionally, you will benefit from the grace period as long as you make your entire payment by the statement due date.

Do THIS If You Can’t Pay Your Amex Platinum Card In Full

FAQ

What happens if I don t pay my American Express balance in full?

Do you have to pay American Express in full?

What happens if you only pay minimum payment on Amex?

What happens if I stop paying Amex?

Do you have to pay off All American Express cards every month?

No, you don’t have to pay off all American Express card every month. Most Amex credit cards allow you to carry a balance from month to month, requiring only a monthly minimum payment to keep your account in good standing. Some even offer 0% introductory APRs. That’s the case with some of the best American Express credit cards like:

What is American Express pay over time?

American Express’s “Pay Over Time” feature allows its flagship products — like the American Express® Green Card, the American Express® Gold Card and The Platinum Card® from American Express — to function more like traditional credit cards. These cards were initially introduced as charge cards rather than true credit cards.

Does Amex automatically enroll in pay over time?

AmEx automatically enrolls your card. You don’t need to activate it or opt in. If you have the American Express® Green Card (see rates and fees), the American Express® Gold Card (see rates and fees) or The Platinum Card® from American Express (see rates and fees), you’re automatically enrolled in Pay Over Time.

Which AMEX cards have a pay over time limit?

Thanks to the Amex Pay Over Time feature, Cards like The Platinum Card, the Amex Gold Card, and the Amex Green Card offer the best of both worlds. Card Members retain no preset spending limit, but they can choose to carry a balance with interest, up to a certain limit.