How Does Flex Pay Work?

Couple shopping for flatscreen
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Consumers cannot always afford to pay for items when they need to make a purchase; some prefer to spread the costs. Some retailers offer flexible payment terms, or flex pay, as an alternative. This allows consumers to order and receive items immediately and pay for them over time. Flex pay has a number of benefits, which makes it an appealing payment solution.

Buy Now, Pay in Stages

Merchants offering flex pay to their customers may impose their own terms. Typically, they allow consumers to order and receive an item immediately. Customers usually need to have a major credit card and must agree to allow merchants to charge a set amount for a set number of payments to the card until the item is paid in full. For example, a merchant selling a television for $1,000 may offer a flex pay option that allows for five monthly payments of $200 each. Consumers can purchase a wide variety of items using flex pay, from appliances to clothes to website hosting.

Acceptable Flex Pay Methods

Under the terms of the agreement, customers give merchants the right to deduct payment from their credit cards. Major credit cards accepted include American Express, Discover, Diner's Club, MasterCard and Visa. Typically, with this payment option, customers do not have to send in payments; they are instead automatically charged to their credit cards. Most flex plans do not allow customers to use checking accounts or money orders to make payments. Only debit cards with the MasterCard or Visa logo can be accepted.

Interest and Fee Free Benefits

Flex pay transactions are similar to credit card transactions because they allow consumers to space out payments. However, the difference between the two is that flex pay plans are interest and fee free transactions, which makes this an appealing option to consumers. They could use credit cards to make purchases so they can pay over time, but they will have to pay interest. Flex pay transactions don't incur interest, so the charges to credit cards are for the price of the item only.

Flex Pay and Credit Checks

Consumers who may not qualify for credit may seek out flex pay plans because they generally don't require credit checks. That's because the items being purchased are secured by major credit cards. They are charged in set increments without needing the permission of cardholders for each charge. Customers must ensure that their cards have enough available credit to meet flex pay charges. They must also keep merchants updated about changes in their billing information, especially if card accounts are closed.

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