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In this article, you’ll learn more about:
Learn how installment plans on credit cards, like those available from Scotiabank through its SelectPayTM plans – can help to provide a flexible way to pay for planned and unplanned purchases (during checkout or after purchase).
You may have seen terms like installment plans (sometimes referred to as buy now, pay later loans (BNPL) appear in your online search recently. You’ll likely see these terms used often, lately in online promotional materials, at checkout counters when you are making purchases, and with your online purchases.
According to a 2022 study, installment plans on credit cards and buy now, pay later loans (BNPL) are becoming increasingly popular. About one in seven Canadians have used them, and more than one in four express interest in using either payment method in the future.6
Scotia’s credit card installment plans are different from BNPLs that may be offered by other providers in that they’re not separate loans, and you don't have to apply for an installment plan under Scotia’s SelectPay. The SelectPay feature is available on eligible Scotiabank credit cards.
Keep reading to learn more about Scotia SelectPay, how it works and if it may be the right choice for you.
With Scotia SelectPay, the installment plan payment option is a feature included on your existing credit card, so you don’t need to do an additional application or credit check to take part, and they are available - both during checkout and after purchase – when you use your eligible Scotiabank Visa credit card to make the purchase. Note that not all Scotiabank 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 installment plans, including banks, merchants, and retail companies – sometimes those plans are included on a credit card or sometimes these payment methods are separate and referred to as “buy now, pay later” loans (BNPL).
Check what type of installment plan is offered on your credit card or by a provider you deal with as they may require a separate credit check or even an application. That is not the case with SelectPay installment plans from Scotiabank that are features of eligible Visa credit cards.
With a Scotia SelectPay installment plan, you can convert eligible purchases made on your eligible Scotiabank credit card of $100 or more2 into monthly installment payments over a fixed period of time3 during checkout or after purchase. Plus, you'll pay a low installment interest rate on the plan (compared to the regular credit card interest rate that applies to purchases on your credit card).
Payment options
SelectPay currently offers 3-, 6- or 12-month periods on installment plans4, allowing you to divide an eligible purchase into smaller amounts. This could be used to help you manage your debt for purchases you need to make.
• Use them online or in-store
Compared to other BNPL solutions, in particular those you may be offered from retailers, the Scotia SelectPay feature is included with your eligible Scotiabank credit card. Other retailers may offer BNPL solutions as separate loans which means you have to apply for them and a credit check is required.
With Scotia SelectPay, you can now choose to set up an installment plan at participating merchants during checkout - when you shop online or in-store or after the eligible purchase is posted to your Scotiabank credit card account, you can convert it through the Scotia mobile app or Scotia online banking.
Scotia SelectPay features
As mentioned above, Scotia SelectPay installment plan offers some useful features, take a look at below:
Convenience of use
Scotia SelectPay installment plans can be accessed in three different ways:
- During checkout when you are shopping in-store, using the point of sale terminal. Note that this option is offered only at certain participating merchants.
- During checkout online when you are shopping, you just need to follow the prompts. However, this option is only available at certain participating online merchants.
- Through the Scotia app or online banking after you have made your purchase on your eligible Scotiabank credit card. If you decided after the purchase was made that you do want to convert that purchase to an installment plan, you can also set it up on an installment plan via your Scotia app or online banking.
Low Interest Rates
The installment interest rates vary by plan. Interest rates start at 5.99% for 3 months, 6.99% for 6 months and 7.99% for 12 months and there is no installment plan fee.2
Flexible payment option periods
3-, 6- or 12-month plans are available.
Scotia app or Scotia online
These tools make it easy to set up and manage your installment plan through the Scotia app or Scotia online banking services when you choose to enroll your posted eligible purchase into an installment plan after you’ve made the purchase and it has posted to your Scotiabank credit card account.
Rewards
If you have a Scotiabank credit card that earns rewards on purchases, you'll continue to earn rewards on the amount of the original purchase, even if you choose to convert it into an installment plan for payment.
No credit check and no new application
To explore the full list of eligible Scotiabank credit cards that offer this feature, visit our Scotia SelectPay Credit Cards page https://www.scotiabank.com/ca/en/personal/credit-cards/selectpay/credit-cards.html
Multiple installment plans
You can choose to set up one installment plan at a time or have multiple plans going at once. There may be a limit to how many plans you can set up at one time.
Easy to cancel
Finally, if you don't need your Scotia SelectPay plan anymore, you can cancel it at anytime using the Scotiabank app without cancellation penalties. The remaining balance will be re-applied to your Scotiabank credit card account and you can then pay the remaining balance on it like you do other purchases (at the interest rate that applies to your purchases).
You can learn more about all of these features on the Scotia SelectPay product page.
Let’s look at an example of when you might need to use an installment plan.
If you rely on your laptop for work or school and one day it just stops working, you don’t have much of a choice but to replace it. Unless you have the cash on hand, you’ll have to find a way to finance the purchase. Rather than charging the purchase to your credit card and trying to pay it off in full at the end of the first statement period (the end of that month when you purchased it), with a Scotia SelectPay plan, you can choose to convert that purchase into an installment plan. Perhaps, a 3-month period installment plan with a low interest rate of 5.99%.
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 |
There are certain situations, like the example above, when using a credit card installment plan can make sense. However, there are also scenarios where you may want to hold off and try to find another option. When considering if an installment plan for your credit card purchase is the right choice for you, you can ask yourself some of the questions listed below.
• Do I need to make this purchase now?
Before using your credit card to make a purchase, ask yourself: Can I pay for this now? Or is it possible to budget for the item, save up and buy it outright? If you have the money to purchase the item outright, this may be the best option. However, if you need to make a large or unexpected purchase in the short term, you can consider using an installment plan to help make the purchase without blowing your monthly budget.
• Can an installment plan help me save money on interest or manage my finances?
IIf you have the cash to pay for your purchase in full in the first month you make, then using an installment plan may not save you money on interest. You should have an interest-free grace period on purchases you make that first month if you can pay your balance on your credit card in full that month.
However, putting a purchase on an installment plan can help you manage your budget and you can use your extra cashflow to manage your finances. Plus, if the alternative is carrying a large balance on your credit card and paying interest at the regular interest rate that applies to purchases until you pay it off in full, then it might make more sense to use an installment plan. As with every financial decision, you'll need to crunch some numbers including the amount of the installment plan interest for the plan.
• Can I pay my monthly installments on time?
Before using an installment plan on your credit card, consider if you have a plan in place to repay your installments on time and in full.
If you miss an installment payment, the provider of that installment plan may charge you interest on the overdue payment so you may incur more interest charges on the unpaid balance (again, those will depend on the provider of the service) or your plan could be cancelled.
In the case of Scotia SelectPay, for example, if you miss a payment, currently your installment plan will be automatically cancelled, and the outstanding balance on your plan will be re-applied to your regular credit card balance. At this point, the re-applied balance will incur interest at the annual interest rate on purchases that applies to your Scotiabank credit card.
So, evaluating if an installment plan is the right option for your financial situation is always a good thing to do.
• Will using a SelectPay Plan affect my credit score?
Another question that may come to mind when thinking about an installment option is how it may impact your credit score. It's a good question to ask, as making the right financial moves can help your credit score.
The good news is that converting an eligible purchase into a Scotia SelectPay plan won't affect your credit score by doing so.
Since you've already been approved for your eligible Scotiabank credit card, there's no need to go through another round of credit checks or approvals only for an installment plan through Scotia SelectPay. Your plan can be for the amount up to your available credit.
But remember that missing a Scotia SelectPay installment plan any month -- or any credit card payment for that matter with us -- could negatively impact your credit score. Remember to always make sure that Scotiabank receives at least your minimum payments on time each month.
Once you've evaluated your financial situation and decided if an installment plan is the right move for you, you may be wondering “how do I use it?"
With Scotia SelectPay, it’s an easy process (see below).
During Checkout Plans: During checkout, either online or in-store, follow these five simple steps to make your purchase with Scotia SelectPay credit card installment plan during checkout:
- Use your eligible Scotiabank credit card to pay for your purchase – as you would typically do - during checkout.
- If you want to convert your eligible purchase into fixed monthly installment payments, select "Installments."
- Choose a Scotia SelectPay installment plan from the options made available to you (3-, 6- or 12-month plan periods) and review and agree to the SelectPay installment plan terms and conditions. Note: Installment Plan options are enabled by Visa Canada.
- Confirm the purchase you want to convert and follow the prompts on the screen. Your receipt will include your installment plan details.
- Once your purchase is posted to your Scotiabank credit card account (typically about 3-5 business days after your purchase), you can sign-in to the Scotia mobile app or your Scotia account online to see your plan status.
After Purchase Plans: You can also enroll in a SelectPay plan after you make a purchase on your eligible Scotiabank credit card account by logging into your Scotia app and following these steps:
- Select your eligible Scotiabank Visa credit card and tap the Scotia SelectPay icon.
- Choose the eligible purchase you want to convert into a SelectPay plan.
- Choose a Scotia SelectPay installment plan (3-, 6- or 12-month plan) and review the applicable fees and/or interest.
- Review and agree to the SelectPay Terms and Conditions.
- Swipe right on the enroll button, and you're done.
- Check your Scotia online banking site or Scotia mobile app for your plan status.
Takeaways
Installment plans, like the Scotia SelectPay, may offer you a convenient and flexible way to pay for eligible purchases over $100. However, like any financial decision, you have to consider whether this option is the right choice for you, based on your personal financial situation and spending habits. An installment plan can be a very useful financial tool; but, like any balance on your credit card, you need to make sure you have a plan in place to pay your installment plans on time and in full.
® Registered trademarks of The Bank of Nova Scotia
®* American Express is a registered trademark of American Express. This credit card program is issued and administered by the Bank of Nova Scotia under license from American Express.
* Visa Int./ Licensed user.
™ Trademark of The Bank of Nova Scotia
† To be eligible, the purchase must be for at least $250 in Canadian dollars (including taxes), or such other amount as we may advise you of from time to time (the “Eligible Purchase”), only at Home Hardware, Home Building Centre, Home Hardware Building Centre, Home Furniture locations in Canada and online at homehardware.ca (the “Home Hardware locations”). See full list of eligible locations across Canada at scotiabank.com/participating stores. Home Hardware locations are subject to change. Applicable on After Purchase only. Other conditions apply.
‡ During checkout (in-store or online) is only available on eligible Scotiabank *Visa credit cards.
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”).
2 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). 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, 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.
3 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.
4 These examples and calculations are approximate and for illustrative purposes only. Interest calculation and plan payment amounts are based on a 21-day grace period in the first month with the eligible purchase amount of $1,200 accruing interest at an installment plan interest rate of 5.99% versus 20.99% (as applicable) over a period of 3 months. The installment plan example does not include the interest that may apply between the transaction date of the purchase and the date your purchase is converted to a Scotia SelectPay plan. Actual plan payment amounts, interest charges and any interest savings will depend on various factors including the outstanding balance at the end of the installment plan period, and the amounts, timing and application of transactions and payments, and any applicable grace periods on your Eligible Account. Interest rate comparison effective as of date of publication and is subject to change.
