American Express unveiled a new mobile feature Wednesday that allows customers to make small installment payments on individual purchases.
The Pay It Plan It feature, available on the Amex app, gives customers the option of paying off individual purchases as they would with a personal loan.
Through the new feature, customers can select purchases of over $100, and then create a monthly payment plan that ranges from three to 24 months. The plans carry a fixed fee and no interest. For purchases of under $100, meanwhile, customers can choose to pay off the transaction in full.
“We are excited to serve our card members by giving them new payment options that they can adjust to fit their financial needs and goals,” Kartik Mani, head of global consumer lending at the New York credit card company, said in a press release.
Mani said the feature is targeted at customers who prefer to make multiple monthly payments, or who are looking for more transparent repayment terms.
Pay It Plan It is available on several consumer credit and cobranded cards issued before June 1. Cards issued after June 1 will have the feature added in early 2018, according to the release.
The new Amex feature comes as personal loans have become more popular among millennials. About 4% of millennials ages 21 to 34 took out unsecured personal loans in 2015, according to a recent analysis by TransUnion. That’s nearly twice the rate of their Generation X predecessors when they were that age.
While the personal loan market is dominated by fintech lenders, traditional banks have begun making moves. Goldman Sachs recently began offering fixed-rate, unsecured consumer loans. TD Bank, Fifth Third Bancorp and SunTrust Banks offer personal loans as well.
If Pay It Plan It proves popular with young adults, it's likely more companies will enter the market, according to Matt Schultz, a senior analyst with Creditcards.com.
"This move is clearly geared toward millennials who have been drawn to the simplicity and transparency of personal loans,” Schultz said by email. “Banks desperately want to have them as customers. If this move is successful in earning American Express more business from millennials, you can bet that other big card issuers will follow suit."