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Buy Now, Pay Later: Flexible Payment Options in Canada

7 min read
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Buy Now, Pay Later: Flexible Payment Options in Canada
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If you have followed this blog long enough, you will know that we believe that the responsible use of a credit card can have a wide range of benefits. As the pandemic restrictions begin to lift, Canadians like you have more reason to make larger purchases.

Maybe you wanted a new laptop, appliance, or furniture; the bottom line is that most Canadians will likely opt to buy these goods on credit. In fact, a survey conducted by the Bank of Canada found that credit card purchases make up 56% of the total value of goods and services purchased.

Instead of carrying a balance month to month and paying ungodly amounts of interest, what if we told you that some credit card companies would offer installment plans for these large purchases at favourable rates?

In this article, we will be talking about the buy now, pay later plan and some of the options available that you can use to your advantage.

Let’s get started.

What is the buy now, pay later plan?

The buy now, pay later plan is essentially financing a purchase with credit. You can buy something in full with the option of spreading the payments over time. There are many buy now, pay later options in Canada, and the movement has grown with programs offered by companies like Afterpay, Sezzle and PayBright.

There are two types of buy now, pay later options to consider:

1- Equal payment plan

The equal payment plan, also called installment payments, establishes the minimum amount you pay each period. When your payment period arrives, you pay the agreed upon amount until it is paid in full.

Most credit card issuers will opt for this.

2- Deferred payment plan

The deferred payment plan has no set payment amounts. You will essentially pay the balance in full when the due date has hit.

How do I get started?

Several major credit card issuers offer credit card installments with varying fees and application processes. The process for most is relatively straightforward.

To get a plan started with your credit card, you can log into your account to see the qualifications, select the eligible purchase you would like to make, find out the cost and installment plan, and there you have it!

Who offers these plans? Top 5 credit card issuers

Here is a look at some of the top issuers of installment loans. As we mentioned before, most issuers will offer favourable interest rates and low fees. These figures are usually based on the total amount and are charged monthly.

Note: For some of the companies featured, these credit card offers will not be shown in Quebec.

1- Scotia SelectPay

What does this plan offer?

The Scotia SelectPay plan offers cardholders a 0% interest rate on purchases of $100 or more.

Payment options

Payment options range from 3,6 and 12-month periods. While there is a SelectPay fee, you will not be charged any other fees associated with setting up the installment plan. This could be an excellent option, considering that the monthly installment fee is calculated by multiplying the entire purchase transaction amount by the total fee % and dividing it by your total months.

Below provides detail on how the plans are structured:

  • 3 months at 0% interest, 2% total fee
  • 6 months at 0% interest, 4 % total fee
  • 12 months at 0% interest, 8% total fee

Total breakdown

It’s time to look at the numbers in action. Let’s say you bought a refrigerator for $900 on a 3-month installment plan with a 2% total fee.

Purchase priceTermMonthly fee amountMonthly payment
$9003 months$6$306

At the end of your term, you would have paid $918. Considering that your average credit card charges 20% interest, this is not bad at all!

Here is a list of a few Scotiabank credit cards eligible for the installment plan:

2- CIBC Pace It™

What does this plan offer?

Next up on the list is the CIBC Pace It™ plan. This credit card installment plan is issued to cardholders in good standing and who make purchases over $100.

Payment options

The CIBC Pace It™ offers cardholders installment options at 6, 12 and 24-months. Unlike the Scotia Bank plan, interest rates vary across each installment option with a one-time installment fee of 1.50% on the purchase amount.

The payment structure looks like the following:

  • 6 months at 5.99% interest, 1.50% one-time fee
  • 12 months at 6.99% interest, 1.50% one-time fee
  • 24 months at 7.99% interest, 1.50% one-time fee

Total breakdown

For simplicity, you could purchase a laptop for $600 on a plan that spanned over 6 months. Here is a breakdown of what that would look like: 



Purchase priceTermMonthly fee amountMonthly payment
$6006 months$9$101.76

You would end up paying a total amount of $619.56. This plan only applies to select CIBC credit cards, including:



3- Plan It™ from American Express

What does this plan offer?

Plan It™ from American Express is a feature that allows cardholders to defer portions of their balance and pay monthly installments on purchases of $250 and over.

Payment options

Plan It™ offers eligible users 4 plan options based on their balance amount and account history. These options range from 3, 6, 9, and 12-month periods and come with a monthly fee of 0.90% of the principal amount.

Here is an example:

  • 3 months at 0% interest, 0.90% monthly fee
  • 6 months at 0% interest, 0.90% monthly fee
  • 9 months at 0% interest, 0.90% monthly fee
  • 12 months at 0% interest, 0.90% monthly fee

Total breakdown

For a total breakdown, we could use the imagine purchasing an ergonomic desk for $1,000 on a 6-month term. The plan would look like the following:

Purchase priceTermMonthly fee amountMonthly payment
$1,0006 months$9$175.67

At the end of your term, your total amount paid would be $1,054. You can also use the Plan it calculator to help you map out the cost of other items you may be interested in buying.

For reference, a select number of cards are eligible for this feature, including:

Plan options and fees may be subject to change depending on the card you own when you make your plan.

4- Accord D by Desjardins

What does this plan offer?

Announced in July, Visa is collaborating with company Desjardins to establish installments for merchants and eligible cardholders.

Desjardins has previously offered financing to its users through its Accord D feature. Accord D provides easy financing options on large purchases over $500 and up to $50,000.

Payment options

Desjardins’ current Accord D financing is much more generous in its terms with eligible cardholders given the possibility of repaying over a period of 6 months to 10 years.

Interest rates are generally fixed and based on the amount, credit history, and loan terms.

Total breakdown

While interest rates vary, using Desjardins rate calculator, we can determine what a $1,000 appliance would cost on a 6-month term and a fixed rate of 14.39%.

Purchase priceTermMonthly fee amountMonthly payment
$1,0006 months$0$173.73

The total cost would equal $1,042.38.

While the announcement of the Visa-Desjardins collaboration is still in the works, you can visit both Visa’s website and Desjardins to learn more about the cards eligible for this program.

5- MBNA Payment Plans

What does this plan offer?

Last but certainly not least, we have the MBNA payment plan. Like some of the previous plans, the MBNA payment plan takes effect for purchases over $100.

Payment options

Eligible cardholders can choose from 6,12, or 18-month payment plans with the following payment structure:

  • 6 months at 0% interest, 4% plan fee
  • 12 months at 0% interest, 6% plan fee
  • 18 months, 0% interest, 8% plan fee

Total breakdown

A great example to highlight the benefits of this plan is purchasing a brand new tv for $1,200 on an 18-month term. Let’s break it down in more detail:

Purchase priceTermMonthly fee amountMonthly payment
$1,20018 months$5.3$72

At the end of your term, you would end up paying $1,296, which is reasonable considering the added flexibility you added to your budget.

Below, you can see a list of a few eligible MBNA credit cards:

For more information, hop onto MBNA’s website to see what you need to qualify and get answers to any questions you may have.

What to avoid

It is important to note that these plans and prices depend on several factors, such as your credit score.

If you do become eligible for an installment plan, it is best practice to avoid doing the following:

  • Neglect to make payments: This should be a given, but you would be surprised how often people can get overwhelmed with their personal finances that they don’t make their payments on time. To be 100% prepared, consider creating an emergency fund.
  • Forget to read terms and conditions: You should always read the fine print on these plans so that you are not on the hook for any additional charges.
  • Spend more than you can afford: If appropriately done, buy now, pay later plans can save you more interest than credit cards. The problem arises when you bite off more than you can chew. Understanding your budget will be vital in avoiding this.

Conclusion

Considering all this information, the buy now, pay later plans are flexible payment options for your budget, especially if you can’t reasonably afford an item outright.

Make sure to do your due diligence before you sign up for a plan and reap the fantastic benefits this plan has to offer.

American Express Cobalt® Card

American ExpressAmex Membership Rewards
Annual fee
$191.88
Our valuation
$255
Milesopedia first-year estimateFirst-year valueWelcome bonus$255Total$255Rewards on your spending are not included. The calculator that adds them from your own profile is on the card's page.
Welcome offer
Up to 15,000 points
Apply Now

on American Express's website

Apply with confidence — no impact on your credit scoreApply with confidenceCheck whether your application will be approved before you submit it, with no impact on your credit score*When you apply for a personal American Express Credit Card, we will tell you whether you are eligible without affecting your credit score. So you can apply with confidence.*Instant decisions are only available for consumer Card applications (also called “personal Cards”).

The American Express Cobalt® Card is the best credit card from American Express, whether you want points for travel or cash back.

American Express Cobalt® Card welcome offer

The welcome bonus is paid out monthly over your first 12 months. You earn 1,250 Membership Rewards points for each monthly billing period in which you charge $750 in net purchases to your card, in any category (1X, 2X, 3X or 5X). That adds up to 15,000 Membership Rewards points over the year, a welcome offer we value at $255.

Earning the full bonus means $9,000 in net purchases spread across 12 monthly billing periods. This offer rewards steady monthly spending rather than one large purchase.

You can use these points as statement credits on everyday or travel purchases, at the same rate either way: 1,000 points = $10.

You can also transfer them to Aeroplan, Avios (British Airways and Qatar Airways), Flying Blue, Marriott Bonvoy or Hilton Honors. With the full welcome bonus, that is a choice between:

  • 15,000 Aeroplan points
  • 15,000 Avios points
  • 15,000 Flying Blue Miles
  • 18,000 Marriott Bonvoy points

If hotel points are what you are after, our ultimate guide to Marriott Bonvoy and our complete map of Marriott Bonvoy hotels by category show what those points can actually buy.

American Express Cobalt® Card benefits

Here is what the card gives you, starting with the benefits cardholders use most.

  • 5X points on eligible eats and drinks in Canada: groceries, restaurants and bars, home food delivery and convenience stores. A spend cap applies.
  • 3X points on eligible streaming subscriptions in Canada.
  • 2X points on eligible gas, public transit and ride sharing purchases in Canada.
  • 1 additional point on eligible hotel and car rental bookings made through American Express Travel Online.
  • 1X point per dollar on everything else, with no category restrictions.
  • Points that hold the same value either way: 1,000 points = $10 as a statement credit, or a 1:1 transfer to several airline and hotel loyalty programs.
  • No minimum income requirement, as with every American Express Canada card.
  • Additional cards at no extra cost: the first and every other supplementary card is $0.
  • The Hotel Collection: a room upgrade when available, 12pm check-in and late check-out when available, and up to $100 USD in hotel credit on amenities charged to the room for a stay of two or more consecutive nights, booked through American Express Travel.
  • Front Of The Line® presale and reserved tickets for concerts and theatre performances, plus offers and events curated for cardmembers through Amex Experiences.
  • A soft credit check before you apply: you can see whether you will be approved with no impact to your credit score. This applies to American Express personal card applications.

To see how it compares with the rest of the line-up, read our round-up of the best credit cards from American Express in Canada.

The 5X categories and where they apply

The 5X rate is the reason most people carry this card. In Canada it covers four kinds of merchants:

  • Groceries: Metro, IGA, Sobeys, Super C, Safeway, Whole Foods.
  • Restaurants and bars: sit-down meals, takeout and drinks.
  • Home food delivery.
  • Convenience stores: Couche-Tard, 7-Eleven.

The 2X rate covers gas stations such as Esso, Shell and Petro-Canada, along with public transit and ride sharing.

With the American Express Cobalt® Card, you earn between 1 and 5 points per dollar:

Category Points per dollar
Grocery (Metro, IGA, Sobeys, Super C, etc.) 5
Home food delivery 5
Restaurants and bars 5
Convenience stores 5
Streaming services 3
Service station 2
Transport 2
Travel 1
Other 1

That works out to a 1 to 5% return on those purchases. For example, if you spend $1,000 per month across groceries, restaurants and food delivery, you earn $50 back per month, or $600 per year from that category alone. Transfer the points to a program such as Aeroplan instead and the return can be higher.

You can also stack these categories with the hundreds of stores that offer 5x points.

American Express Cobalt® Card insurance coverage

The card comes with a broad insurance package. The amounts below are the coverage limits; conditions, age limits and exclusions are set out in the certificate of insurance linked in the Insurance section above.

Travel insurance

  • Emergency medical: up to $5,000,000 for the first 15 days of a trip.
  • Travel accident: accidental death and dismemberment of up to $250,000 for you, your spouse and dependent children under age 23 when travelling on a common carrier (plane, train, bus or ship) and the tickets are charged to your card. Supplementary cardholders and their families are covered too.
  • Flight delay: up to $500 for necessary hotel, meal and sundry expenses bought within 48 hours when you are delayed or denied boarding for four hours or more and no other transportation is available. This $500 is an aggregate limit per occurrence, shared with missed connection and delayed baggage coverage.
  • Delayed baggage: up to $500 for essential clothing and sundries bought within four days when your outbound luggage is delayed six hours or more. This $500 is an aggregate limit per occurrence, shared with missed connection and flight delay coverage.
  • Lost or stolen baggage: up to $500 per occurrence for all insured persons combined, for checked or carry-on baggage and personal effects in transit, when the airline tickets are charged to your card. Within that limit, jewellery is capped at $300 per occurrence and golf clubs, including golf bags, at $250 per occurrence.
  • Hotel and motel burglary: up to $500 against the loss of most personal items if your hotel or motel is burglarized, when the stay is charged to your card.

Rental car insurance

Theft and damage coverage is included for a rental car with an MSRP, for its model year, of up to $85,000 excluding all taxes, for rentals of up to 48 days. To use it, decline the Loss Damage Waiver (LDW) or any similar option from the rental company and charge the full rental to your card. There is no cost for this coverage, and it replaces the daily insurance the rental company charges, usually $16 to $23 per day.

Mobile device insurance

Your device is covered for up to $1,000 per occurrence when it is charged to the card, for up to two years from the date of purchase. The payout is based on the depreciated value of the device, which falls by 2% of the purchase price for every completed month, less a 10% deductible. Theft and accidental damage coverage starts on the 91st day after purchase, because the first 90 days are covered by purchase protection.

Purchase protection and extended warranty

Eligible items charged to your card are insured against accidental physical damage or theft for 90 days from the purchase date, up to $1,000 per occurrence for all items combined. The card also extends the original manufacturer’s warranty by up to one additional year on eligible items, with indemnification limited to $10,000 per insured item and $25,000 per Cardmember per policy year for all items combined.

American Express Cobalt® Card fees

  • Card fee: $15.99 per month, which equals $191.88 per year, for residents outside Quebec. Quebec residents are billed $191.88 per year.
  • Additional cards: $0.
  • Purchase interest rate: 21.99%.
  • Cash advance interest rate: 21.99%.
  • Foreign transaction fee: 2.5%.
  • Minimum income required: none.

Because the fee is billed monthly rather than in one annual charge, you can stop and restart the cost in step with how much you are actually using the card.

Legal

American Express is not responsible for maintaining or monitoring the accuracy of information on this website. For full details and current product information, click the Apply Now link. If you apply and get approved for an American Express Card, we may receive compensation from American Express, which can be in the form of monetary payment.

Annual fee

Primary card$191.88
Additional card$0

Annual income required

Individual$0
Household$0

Conversion fees

2.5%

Earning rate

  • 5xRestaurants
  • 5xGroceries
  • 5xConvenience
  • 3xStreaming
  • 2xTransit
  • 2xGas & EV
  • 1xAll spending

Value

1st Year Value$1,828
2nd Year Value$799

Transfer partners

  • AeroplanAirline
  • British Airways ClubAirline
  • Cathay Asia MilesAirline
  • Etihad GuestAirline
  • Flying BlueAirline
  • Hilton HonorsHotel
  • Marriott BonvoyHotel

Travel insurance

Travel medical (under 55)Up to $5,000,000 / 15 days
Travel medical (55-64)Up to $5,000,000 / 15 days
Delayed BaggageUp to $500
Lost BaggageUp to $500
Flight DelayUp to $500
Hotel BurglaryUp to $500
Travel AccidentUp to $250,000

Purchase protection

Purchase ProtectionUp to $1,000 / 90 days
Extended Warranty+1 years
Mobile DeviceUp to $1,000 / 2 years
Auto Rental Collision (primary)Up to $85,000 / 48 days

Our featured card

Featured

Marriott Bonvoy® American Express®* Card

American ExpressMarriott Bonvoy
Annual fee
$120
Our valuation
$990
Milesopedia first-year estimateFirst-year valueWelcome bonus$990Total$990Rewards on your spending are not included. The calculator that adds them from your own profile is on the card's page.
Welcome offer
Up to 110,000 points
Ends Sep 22, 2026
Apply Now

on American Express's website

Apply with confidence — no impact on your credit scoreApply with confidenceCheck whether your application will be approved before you submit it, with no impact on your credit score*When you apply for a personal American Express Credit Card, we will tell you whether you are eligible without affecting your credit score. So you can apply with confidence.*Instant decisions are only available for consumer Card applications (also called “personal Cards”).

The Marriott Bonvoy® American Express®* Card is the best credit card in Canada for free hotel nights.

New Cardmembers can earn up to 110,000 Marriott Bonvoy® points with the current offer:

  • Earn 80,000 points after you spend $6,000 on your Card in your first 6 months of Cardmembership.
  • Plus, earn 30,000 points by making a purchase during your 15th month of Cardmembership.

This offer ends on September 22, 2026. The annual fee is $120, and there is no annual fee on Additional Cards, so you can add a partner or a family member at no extra cost.

Every year after your first Card anniversary, you receive an Annual Free Night Award good for a redemption of up to 35,000 points at eligible hotels and resorts worldwide. At a valuation of 0.9 cents per Marriott Bonvoy point, that certificate is worth roughly $315, which on its own more than covers the $120 annual fee. That is the main reason to keep this Card year after year instead of cancelling it.

To get the most out of the certificate, aim it at a night that would otherwise price close to the 35,000 point ceiling.

The Card also gives you 15 Elite Night Credits each calendar year and automatic Marriott Bonvoy Silver Elite status. Those credits count toward the next Elite tier, so you begin every year 15 nights ahead of where you would otherwise start.

You move up to Gold Elite status automatically when you reach $30,000 in purchases on the Card in a year, or when you combine 10 qualifying paid nights within one calendar year with the 15 Elite Night Credits from your Card.

Marriott Bonvoy points are generally valued at 0.9 cents each. On that basis, the 110,000 point welcome offer is worth about $990, and an Annual Free Night Award used at its full 35,000 point ceiling is worth about $315.

Marriott Bonvoy points pull their weight on free nights rather than on gift cards or merchandise, which is why this Card should be judged on the hotel stays it produces.

You earn 5 points per dollar on eligible purchases at participating Marriott Bonvoy hotels and 2 points per dollar on all other purchases. Points can be redeemed for free nights with no blackout dates at more than 7,000 hotels around the world.

The Card carries a solid package of coverages: $500,000 travel accident insurance, flight delay, baggage delay, lost or stolen baggage and hotel or motel burglary at $500 each, car rental theft and damage up to $85,000 for rentals of up to 48 days, Purchase Protection for 90 days and a one year Extended Warranty.

Two things to plan around: the 2.5% foreign transaction fee on purchases made in a foreign currency, and the 21.99% purchase interest rate, which makes this a Card to pay in full every month. Like all American Express Canada Cards, no minimum income is published for this Card, and you can see whether you would be approved before you apply, with no impact on your credit score.

Legal

American Express is not responsible for maintaining or monitoring the accuracy of information on this website. For full details and current product information, click the Apply Now link. If you apply and get approved for an American Express Card, we may receive compensation from American Express, which can be in the form of monetary payment.

Annual fee

Primary card$120
Additional card$0

Annual income required

Individual$0
Household$0

Conversion fees

2.5%

Earning rate

  • 5xMarriott Bonvoy hotels
  • 2xAll spending

Value

1st Year Value$1,437
2nd Year Value$312

Travel insurance

Delayed BaggageUp to $500
Lost BaggageUp to $500
Flight DelayUp to $500
Hotel BurglaryUp to $500
Travel AccidentUp to $500,000

Purchase protection

Purchase ProtectionIncluded
Extended Warranty+1 years
Auto Rental Collision (primary)Up to $85,000 / 48 days

Our editorial integrity

Our reviews and rankings are based on an objective assessment. Advertisers do not influence our content. We may receive compensation through some links; our analysis and opinions remain independent.