AmEx Says It's in No Rush to Get Paid BackBy
Customers can now finance individual purchases for monthly fee
AmEx has sought to increase lending as rivals sweeten terms
American Express Co. is telling customers to take their time paying it back.
The lender will allow its credit card users to pay off individual purchases over a period as short as three months or as long as two years, the New York-based company said Tuesday in an emailed statement. Cardholders will be charged a fixed monthly fee for the service, which will always be less than or equal to the amount of interest they would have accrued, said Kartik Mani, head of global consumer lending.
“There’s that visibility up front,” Mani said in a telephone interview. “The monthly fee structure helps give the customer more control over what their outlay is going to be for a purchase that they’ve decided they’re going to pay over a period of time.”
AmEx’s focus on revenue from card fees helped it become the largest U.S. credit-card issuer by purchases. Still, the company is only the seventh-largest issuer based on outstanding card loans because many of its customers pay off their balances each month. As more competitors sweeten terms for card holders and threaten AmEx’s spend-centric strategy, the issuer has looked to lend more to its existing customers.
Card customers will also be allowed to pay back small purchases immediately. The company decided to make the change after noticing some users were making multiple payments toward their monthly bill, Mani said. The feature, which AmEx calls “Pay It,” will be available for purchases under $100, he said.