If you’re looking for travel rewards cards with lots of benefits, it’s hard to beat the Platinum Card® from American Express. It’s expensive, costing $695 per year (see rates and fees), but for that you’ll get over $1,500 in annual spending credits, airport lounge access, a great welcome offer, and more. Terms apply.
This American Express card also has a unique rule that sets it apart from most other cards. This can sometimes confuse new cardholders, so be sure to read up on it before applying.
The Amex Platinum Card is designed for full payment
With credit cards, you don’t have to pay your bill in full each month. You can do that if you want, and that’s generally the best option from a financial perspective. If you pay the entire bill amount, you won’t be charged interest on your purchases.
However, you only have to make a minimum payment. For large balances, the minimum payment is usually around 2%. For example, if you have a balance of $3,000, the minimum payment may be as low as $60. You could pay that amount and carry the balance over to the next month, but you would be charged interest.
The Platinum Card® from American Express works differently. Technically, it is not a credit card. With this card, you have to pay off your account balance in full every month.
This isn’t necessarily a bad thing. Credit card debt is a common problem and costs people a lot of money. Having to pay back the full amount gives you less flexibility, but it’s also a good motivator to avoid overspending and getting into debt.
The exception: Pay Over Time
This is where it gets a little confusing. The Platinum Card® from American Express also offers the option to pay off eligible fees over a longer period of time. This is called Pay Over Time (seems fitting). Here’s how it works:
- “Pay Over Time” is a feature that you can turn on and off. You have this option in your online account or you can call American Express to do it. It is enabled by default when you first get your card.
- There is an overpayment limit that applies to you. The Platinum Card® from American Express does not have a preset spending limit, but the Pay Over Time feature does.
- If you use the Pay Over Time option, eligible charges will be aggregated into this category. You don’t have to pay it back immediately.
- You will be charged interest on Pay Over Time balances. The interest rate is, as with credit cards, rather high (see interest and fees).
- Conditions apply.
For example, let’s say you put $1,000 on your card and $500 is eligible for installment. You must pay off the $500 that doesn’t qualify for installment by the due date. You can either pay off the other $500 or roll that balance over to the next month.
Since this card doesn’t have a preset spending limit, it’s possible that you could exceed your Pay Over Time limit. If that happens, you’ll have to pay off your balance by the due date. For example, your Pay Over Time limit is $10,000, but your card balance is $11,000. Even if that all qualifies for Pay Over Time, you’d still have to pay at least $1,000.
Do your best to pay the full amount
Rewards cards, including the Platinum Card® from American Express, typically have high interest rates. It’s not a good idea to carry a balance and pay interest unless it’s absolutely necessary.
You’ll get the most out of this American Express card if you pay in full. That way, you can enjoy all the benefits without paying expensive interest. Be mindful of how much you spend and get into the habit of paying off the entire balance by the due date.
