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Is there any disadvantage to Amazon pay monthly?

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On credit: Amazon lets you pay in installments

With Christmas looming large on the horizon and the economy in worse shape than Putin’s chances of winning the Nobel Peace Prize, many may consider taking up Amazon’s offer to pay for expensive goods in monthly instalments. But are there any downsides to Amazon pay monthly? I’ve bought an item using the scheme to find out exactly how it works and whether there are any hidden costs to paying Amazon this way.

How do you pay in instalments on Amazon?

If you look at the pricing details of many items on Amazon, you will find an option to pay on a monthly basis lurking under the price of the item. It’s shown in the top right-hand corner of the screen if you’re on the Amazon website, as shown below:

Amazon pay monthly

This option doesn’t appear on all items, and it’s not easy to work out why that is. Perhaps third-party retailers who sell via Amazon are allowed to opt out of the scheme, but that’s pure speculation on my part.

How does Amazon Pay monthly work?

You will be offered the chance to pay for the goods in either five or 12 monthly installments, and there is no interest charged on those payments. In other words, you’ll pay no more if you choose to pay monthly than if you pay the entire sum up front.

When I chose the option to pay on a monthly basis for a new phone, Amazon ran a bank authorisation check on my credit card for the full amount. Presumably this is to check that I currently have sufficient funds to cover the entire payment, even if it won’t take the full amount immediately.

Once the transaction had gone through, I was emailed a payment schedule, detailing when each of the next four instalments would be paid. Annoying this schedule doesn’t give the actual dates when the money will be taken, it simply says “30 days from shipment date”, “60 days from shipment date” and so on.

So, what’s in this for Amazon? And what are the risks of paying in monthly instalments instead of one lump sum?

What are the downsides of Amazon pay monthly?

As we’ve already established, there is no interest payment if you choose to pay in installments, so there’s no additional cost. (Your credit card company may still charge interest on any unpaid balance at the end of the month, of course.)

What happens if you change bank cards or don’t have enough money/credit on your card to make a monthly payment? Amazon’s terms and conditions state:

If we are unable to complete a charge using your chosen payment card, you authorize us to charge a payment to any other payment card we have on file in your Amazon.co.uk account. You agree to maintain in your Amazon.co.uk account at least one valid payment card that expires no earlier than 20 days after your last payment due date.

If Amazon isn’t able to take a payment from any card on your account, Amazon’s Ts & Cs state:

Our remedies will include the right to deregister your Device, which will block your ability to access Amazon content from this Device. We may also suspend or terminate your Amazon.co.uk account. You agree that we and our affiliates have no liability related to the exercise of these remedies.

Although it’s not explicitly stated, I’d also imagine Amazon would attempt to recover the debt and nasty things would happen to your credit rating. Cutting and running would be a very risky option, so don’t take on any monthly payments that you cannot afford in the long term. Rule of thumb: if you can’t afford to pay for it outright, you probably can’t afford to buy it.

In short, I can’t see any disadvantage to Amazon pay monthly, as long as you can make the repayments. Let me know on comments if you disagree.

What happens if my payment card changes during the repayment cycle?

Amazon provides a link to what it calls its “self-service portal” in the email that stipulates your repayment dates. From here, you can change the payment method. You can also get a precise date on when your next payment is due from this portal.

Can I make an early repayment?

Yes, you can pay off the balance of what you owe at any time, without penalty. However, you can only repay the full amount, you cannot pay off only part of the outstanding balance. The pay early option is found in the self-service portal.

What time does Amazon stop delivering?

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About the author

Barry Collins

Barry has scribbled about tech for almost 20 years for The Sunday Times, PC Pro, WebUser, Which? and many others. He was once Deputy Editor of Mail Online and remains in therapy to this day. Email Barry at barry@bigtechquestion.com.

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