Credit Card News
U.S. Bank Introduced “Buy Now, Pay Later” Split Credit Card
A new U.S. Bank product combines a traditional credit card with a “buy now, pay later” (BNPL) model.
About the U.S. Bank Split Card:
U.S. Bank has revealed its latest credit product: the Split World Mastercard. The “Split” part of the card’s name refers to the unique “buy now, pay later” model it offers. In contrast to most credit cards, which total up purchases and allow customers to make a minimum payment (while paying interest on the remaining balance), the Split card defaults to a multi-month payment plan.
With the card, all purchases made will automatically be enrolled in a three-payment plan. These three payments are made over the course of three months with no fees or interest.
However, cardholders can also apply to extend their plan to six or 12 months. To be eligible for these options, purchases must be over $100. Additionally, customers must select this option via online banking or the U.S. Bank mobile app before the end of the billing cycle during which the eligible purchase was made. Note that a Plan Fee will apply to six and 12-month payment options. The total of this fixed fee will be disclosed at the time that customers choose their extension option.
The U.S. Bank Split card has no annual fee.
My Thoughts:
Well, I definitely can’t blame U.S. Bank for wanting to jump aboard to BNPL bandwagon — and I give them some credit for doing so in a unique way. That said, this Split product just reminds me that there are several different reasons why someone might want a credit card. On that note, for me, this card is completely uninteresting as it lacks any sort of rewards.
Comparing it to most BNPL options, there are a couple of pros on cons. On the upside, it seems that no down payment is required. Plus, while many “buy-in-four” services require you to pay off the purchase within two months, the Split card offers three. Of course, each of these payments will be larger since there are only three as opposed to four. Also, although BNPL platforms may only do a soft pull of your credit, applying for a credit card will result in a hard inquiry on your credit report.
While the bank doesn’t give any specifics on these Plan Fees, a graphic included on the site shows a 12-payment plan totaling $116.73 per month, including a $21.01 monthly fee. That seems pretty steep, but it may be worth comparing to regular credit cards, I suppose.
Ultimately, as the holiday shopping season approaches, perhaps some will find this card useful — but you’ll want to be sure to stick to the three-month plans if at all possible.
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