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Over the last few years, installment plans have been gaining popularity among Canadians of all ages, from Gen Z to boomers. For many, the appeal of an installment plan (if you have this feature on your credit card) is that it gives you another way to pay for your credit card purchases and pay off your balance.
Let's dive into what it is and how it works.
What is a credit card installment plan?
A credit card installment plan is a way to pay for purchases made over a fixed period – through your credit card. It can help you to take control of your budget and manage your spending by providing flexible payment options on your credit card.
Instead of trying to come up with the money to pay off your credit card purchase in one lump sum, the installment plan feature - if included with your credit card - allows you to split your payments up over time - usually over three, six, or 12-month periods.
An installment plan also usually includes a fee, which can work in different ways like a monthly fee or a total upfront fee. Under these plans, you will know in advance what you will need to pay on each installment per month.
It’s important to not confuse a credit card installment plan with a "buy now, pay later" option. With credit card installment plans, because these payment options are a feature included on your existing credit card, you don’t need to do an additional application or credit check to take part. Note that not all credit cards include the installment plan feature but if they do you may wish to consider one for your next purchase.
There are different providers who offer these types of installment plans, including banks, merchants, and retail companies.
How does a credit card installment plan work?
Let's say your laptop stops working and you need to buy a new one for$1,200. You may not have an extra $1,200 sitting around but, you still need a new laptop in order to do your job. So, you put the $1,200 purchase on your credit card.
With a credit card installment plan, you can choose to convert an eligible purchase, paid for with your credit card, into several payments on your credit card. This means you can split up your $1,200 purchase and pay it back in multiple smaller installments based on the terms of your installment plan. You will need to pay your minimum payments each month for the installment plan and that amount is based on your specific purchase and the repayment period you choose.
Let’s say you bought a $1,200 laptop and converted it into a 3-month Scotia SelectPay installment plan with a low installment interest rate of 5.99% and no installment plan fee.
Your payments and interest for your Scotia SelectPay plan would be as follows:4
| Month | Monthly Installment Plan Payment (Principal Amount + Accrued Interest) |
Interest |
| Month 1 | $404.00 | $0.00 |
| Month 2 | $404.00 | $8.27 |
| Month 3 | $403.01 | $2.74 |
| Total | $1,211.01 | $11.01 |
Here’s how much you could save on interest on that same purchase for 3 months versus if you paid it off at a typical credit card annual interest rate of 20.99%:4
| Interest Rate | Interest Payments over 3 Months | |
| Scotia SelectPay 3- Month Installment Plan Interest Rate | 5.99% | $11.01 |
Credit Card Annual Interest Rate on Purchases |
20.99% | $38.47 |
| Total Savings | $27.46 | |
For illustrative purposes only. Certain assumptions and exclusions apply. See below4 for more details.
You can also use installment plans for larger purchases that you have planned, like a home renovation. When you are looking at all the expenses of your planned renovation, you can use an installment plan to manage your payments.
Scotia SelectPayTM
Scotiabank now offers an installment plan available on eligible Scotiabank credit cards called Scotia SelectPayTM. With Scotia SelectPayTM, there is a minimum purchase price of $100 but no maximum purchase amount. You can choose to have several active installment plans going at the same time. This can help you control your monthly budget while managing unexpected expenses, like car repairs, or larger purchases you may be making, like new appliances.
Benefits of credit card installment payments
Make eligible credit card purchases1 more manageable. No credit checks needed.
Interest rate – Enjoy low installment plan interest rates and no installment plan fee during the payment period2
Choose flexible payment options to suit your budget3
Continue to earn and enjoy all your credit card benefits like your rewards, cash back, and insurance coverage.
Who is eligible for a Scotia SelectPayTM Installment Plan?
You qualify for a Scotia SelectPay plan, if:
- You are the primary cardholder of an eligible Scotiabank credit card (accounts with a co-borrower are currently not eligible for Scotia SelectPay)
- Your account is in good standing
- You made an eligible purchase of $100 or more with your eligible Scotiabank credit card
- Your account does not have more than 50 Scotia SelectPay Plans at the same time.
- You use Scotia mobile app and Scotia online banking (required if you choose to enroll your posted transaction into an installment plan after you made the purchase)
- You’re a resident of a province or territory in Canada
We may change the eligibility requirements from time to time.
Is an installment plan the right choice for me?
Whether or not an installment plan is right for you depends on your financial needs and how you budget.
Like using any credit card, you want to make sure you use your installment plan (or plans) that are part of your credit card responsibly. It's important that you are not making purchases that will overly stretch your budget even if you want to use the installment plan on your card to pay that purchase. You will need to build the amount of your installment payments that are part of your credit card balance into your monthly budget so that you can pay them off on time each month and keep your Scotiabank credit card account and credit score in good shape.
You can talk with your Scotiabank advisor to find out if credit card installment plans are the right choice for you and your budget.
1 To be eligible, the purchase must be for at least $100 in Canadian dollars (including taxes), or such other amount as we may advise you of from time to time (the “Eligible Purchase”).
Scotia SelectPay is an installment plan feature (the “Plan”, “Installment Plan” or “SelectPay”) made available on eligible Scotiabank credit card accounts (the “Eligible Account(s)”) that allows primary cardholders to convert an eligible credit card purchase of at least $100 in Canadian dollars (including taxes) posted to the Eligible Account to an Installment Plan with monthly payments over a fixed payment period (the “Installment Payment Period”) with a fixed interest rate (the "Installment Rate") during the Installment Payment Period that applies to that Plan.
The total amount of your Installment Plan will be divided over the months you selected in your Installment Payment Period in monthly installment payments of equal amounts over a fixed period, except for the last installment payment, which may be higher or lower than the other installment payments, due to rounding.
No installment plan fee (the “Installment Plan Fee”) applies to these Installment Plans.
The Installment Rate and installment Payment Period may vary per Plan and will be disclosed to you at the time you select the Plan.
All Installment Rates and applicable Installment Fees and other applicable terms of Installment Plans are subject to change. Installment Plan offers cannot be combined with any other offer.
The Installment Rate that applies to your Plan will apply during the Installment Payment Period to the amount of your Eligible Purchase converted to a Plan on the date the Plan is processed (the conversion date) to your Account. Prior to that conversion date, the annual interest rate on Purchases that applies to your Account will apply to that Eligible Purchase from the transaction date.
If we do not receive payment of the full balance (the “New balance”) by the payment due date that appears on your statement in the month in which the Eligible Purchase was posted to your Eligible Account you will lose the benefit of your interest-free grace period on that Eligible Purchase and any applicable interest during that time will then apply at the annual interest rate that applies to Purchases on your Eligible Account from the transaction date until the conversion date.
You may lose the benefit of the Installment Rate and your Plan could be cancelled if we do not receive payment of your monthly minimum(s) payment applicable to your Plan (the “Current Installment Payment”) by your payment due date while your Plan is in effect (as set out in your full SelectPay Installment Plan terms and conditions - see below for which terms and conditions apply to your Eligible Account). If that occurs, any remaining outstanding balance owing on your Plan at the time of cancellation will be subject to the then current annual interest rate that applies to Purchases on your Eligible Account
In the case of Eligible Accounts that are subject to the SelectPay Terms and Conditions after January 29, 2024, if we do not receive payment of the entire amount of your Current Installment Payment by the payment due date shown on that statement, any unpaid portion of that Current Installment Payment will accrue interest at the annual interest rate that then applies to Purchases on your Eligible Account beginning from the first day of the statement period after the missed Current Installment Payment until that amount is paid in full. You will still owe us payment of any Current installment Payment(s) due after that missed payment.
Any unpaid remaining balance on your Installment Plan (the “Remaining Installment Amount Balance”) after the Plan ends or is cancelled by you or us will be applied to the outstanding balance on your Eligible Account. Your Remaining Installment Amount Balance is again eligible for an interest-free grace period. You will not pay interest on that Remaining Installment Amount Balance if we receive payment of the full balance (the “New balance”) that appears on your statement in the month in which your Remaining Installment Amount Balance was applied to the outstanding balance on your Eligible Account. If you lose your interest-free grace period on the Remaining Installment Amount Balance, any applicable interest will then apply at the annual interest rate that applies to Purchases on your Eligible Account on that amount from the date of expiration or cancellation of the Installment Plan until the amount is paid in full.
Your Eligibility to convert an Eligible Purchase to an Installment Plan and the terms made available to you are subject to Scotiabank’s assessment at the time you request to convert your Eligible Purchase to a Plan. SelectPay is only available through the Scotia mobile banking app and Scotia online to primary cardholders on an Eligible Account.
Eligible Purchases that we identify to you as eligible for a SelectPay Plan (After Purchase Plans) must be converted to a Plan through our Scotiabank Online or Scotiabank mobile banking within the time period as described in your SelectPay plan terms and conditions otherwise those Eligible Purchases may no longer be eligible for a Plan.
See the full Terms and Conditions for eligible Scotiabank Credit cards, eligible purchases and additional SelectPay terms and conditions, which are subject to change.
Other term durations may be available to you and if so, will be disclosed to you in our offer to you when you select your plan.
