Is CIBC's New Installment Offer Pace It Any Good?

The Canadian Imperial Bank of Commerce (CIBC) has started a new feature for their credit cards. The “Pace It” program lets customers pay for qualifying purchases above $250 in installment payments of either 6, 12, or 24 months. Is there a catch? Actually no.

Customers benefit from a lower interest rate on these purchases, although there is a 1.5 percent one-time fee on all purchases under the Pace It plan.

Here's how it works:

Examples of the 6-, 12-, and 24-Month Installment Plan Payments

When you make an eligible purchase of $250 or higher, you will see the “Eligible for Installments”, option in the transaction history. After you pick an installment plan option (6-, 12-, or 24-months), the one-time 1.5 percent fee is then applied.

Let's say you make an eligible purchase totalling $300, here's the installment plan breakdown:

6 payments at 5.99 percent

• Your monthly payment is about $50.88 and there's a $4.50 installment fee.
• The $300 purchase is now $309.78.
• With a 19.99 percent interest rate, you would pay $317.74 for this purchase, that’s $7.96 more interest.

12 payments at 6.99 percent

• Your 12 monthly payments are about $25.96 each, and there's a $4.50 installment fee.
• The $300 purchase is now $316.02.
• At a 19.99 percent interest rate, you would pay $17.48 more in interest.

24 payments at 7.99 percent

• Your monthly payment is about $13.57, and there's a $4.50 installment fee.
• The $300 purchase is now $330.18.
• Under the standard 19.99 percent interest rate, you would pay $36.31 more in interest than you would with the Pace It

Pace It Plan Benefits and Features

The Pace It installment plan is available through most of the CIBC credit cards for personal accounts. And, customers can choose to select their regular credit card option or the Pace It installment plan for any qualifying purchases.

According to Edward Penner, CIBC’s Executive Vice-President, CIBC understands that Canadians might have large and unplanned purchases. The Pace It plan gives credit cardholders more flexibility as they can select their payment term and interest rate.

Pace It plan benefits include:

• Customers can choose the payment terms and interest rate they want
• Customers still have the benefit of rewards privileges and insurance through their credit card
• Any purchases will be based on current credit scores/approval so customers don’t have to reapply for credit
• Customers have fast digital access to the installment plan through their mobile device
• The installment plan terms will show on the monthly billing statement

How to Start Using CIBC’s Pace It Plan

Current CIBC customers that want to start using Pace It should look for the words, “Eligible for Installments" when they make their purchases. New customers can apply for any CIBC credit card to take advantage of this feature. To take advantage of the Pace It plan, CIBC cardholders need to live in an eligible province or territory. However, the plan is not open to Quebec residents.

The plan includes a few other incentives that can help customers. CIBC customers can cancel the installment plan anytime (and switch back to regular credit card payments). They can also set up more than one installment plan at a time. To make sure this program is right for you, compare the best credit cards at RATESDOTCA.