Is It A Good Idea? – Forbes Advisor

If Pay Over Time is activated on your card, eligible charges are automatically added to your Pay Over Time account. Because charges are automatically added to your Pay Over Time balance, it’s extra important to be aware of when your card statement closes and pay it off before the due date, otherwise you can be charged interest.

Amex sets a Pay Over Time limit, but it’s a limit on the Pay Over Time balance you can carry rather than a set spending limit. Your balance carried with Pay Over Time cannot go over your Pay Over Time limit, just like with a credit card cannot exceed your credit limit.

When it comes to paying your Pay Over Time balance, you have a few options. You can choose to pay off the balance in full each month, which also allows you to avoid paying interest. You can opt to pay the minimum balance. Or, you can pay the minimum payment plus any additional amount you choose.

Charge Cards vs. Credit Cards

Most people are familiar with credit cards and how they work. However, there is another form of credit-type payment called a charge card. A charge card differs from a credit card in a few distinct areas.

First, with a charge card, you must pay off your balance in full each month, unlike a credit card where you are only required to pay the minimum payment each month.

This extra flexibility from credit cards comes at a price. Cardmembers who carry a balance are generally required to pay interest on their balance. This rate is determined by the card provider and is dependent on the individual and their creditworthiness. When it comes to credit cards which earn rewards, a high APR is almost guaranteed.

Charge cards, on the other hand, do not incur interest charges since cardholders are required to pay off their balance in full generally each month. With Amex pay-in-full cards, you’ll be charged a fee on the balance you carry.

Another difference is the limit on how much money the issuing bank will lend you. Charge cards have no preset spending amount. While credit cards, on the other hand, come with a specified limit, which is unique to the specific card, the individual and dependent on their creditworthiness.