This repayment hack could help you knock out credit-card debt faster

Chase announced earlier this fall that in November it will discontinue its free payment management system Blueprint, due to low participation rates. As part of its tools, Blueprint allowed cardholders to choose purchase categories to pay off in full each month, and to divide a larger purchase into installments.

(A spokeswoman said the bank is constantly evaluating products to provide value to customers. As an alternative to Blueprint, she said, it offers “Fixed Amount Auto Pay” wherein users can set a recurring payment amount other than the monthly minimum.)

American Express offers “Pay It Plan It,” letting cardholders split up purchases of $100 or more to repay over time.

There’s a fixed monthly fee for using the plan, of up to 1.16 percent of the purchase. That could prove pricier for consumers that shifting their debt to a no-interest or low-interest card, said Papadimitiou.

“Most people are really bad at understanding the APR on a monthly fee,” he said.

(American Express did not respond to requests for comment.)

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To get the same impact absent a tool from your financial services provider, you could review your statement on your own and target categories or purchases for repayment. Experts say an easier way is to divide how you pay.

Papadimitriou recommends what he calls the “island” approach.

“Essentially you have two credit cards,” he said. “One you have to pay in full every month.”

Hold the second in reserve for any purchase you anticipate financing over time. That second card should have a promotional no-interest or low-interest deal on purchases or balance transfers, he said.

Such a split helps you avoid continuing to roll a balance forward, curtailing interest charges, Papadimitriou said.

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