Splitting Your Payments on Multiple Credit Cards in Canada

It’s Saturday night and you’re out for dinner with friends.  When it’s time to pay, everyone whips out a credit card. No problem, right? It is quite common to split the bill like this. But is it possible to split your payment onto multiple credit cards or through instalment payments in other scenarios?

In this article, we’ll answer that question, discussing split credit card payments and whether they make sense for you.

How to Split Payments on Credit Cards in Canada

A split payment allows you to divide the cost of a purchase across more than one payment source. When it comes to making these payments with your credit card, there are two possible routes, and each one has its time and place. The options you have are split tender payments and instalment plans.

Split tender payments

With split tender payments, you use multiple credit cards to pay for your purchase. This type of payment scheme is most common for in-store purchases. The reason? Most e-commerce platforms do not allow you to use more than one credit card at a time.

Instalment plans

The second option for split payments is using a credit card instalment plan. Many Canadian issuers now allow you to convert a single purchase into multiple monthly payments. This includes BMO PaySmart, Scotiabank SelectPay™, CIBC Pace It™, TD Payment Plans, and American Express Plan It. These plans allow you to spread out payments over time which makes it easier to manage large expenses.

When Each Payment Option Makes Sense

Multiple Credit Cards

Using multiple credit cards for one purchase can be helpful in certain circumstances. If you have an expensive purchase, for example, you may need to use multiple credit cards since your credit limit will restrict you. Unless, of course, you have a credit card with no preset spending limit, though most of us don’t find ourselves in this flexible situation.

While the “multiple cards” approach may be practical in some situations, it is not always available. Especially when making purchases online. Workarounds do, however, exist. For example, you may be able to use PayPal to combine funding sources. Or, even, purchase retailer-specific gift cards with different credit cards, then apply those towards the purchase. 

Instalment Plans

For large, pre-planned purchases, instalment plans can be helpful tools. When buying expensive electronics or making home improvements, these plans allow you to spread out the cost over multiple payments. You can potentially even find a zero interest rate promotion on these payment plans, which makes it even easier to manage your cash flow. And, if a no-interest plan is not available, you can often find low rate options.

Note: 0% interest plans are rare in Canada and eligibility for instalment plans is dependent on both the purchase and the merchant. 

The Smart Way To Use Split Payments

Splitting your payments is helpful, but only if you approach it with a plan. Before you decide to divide a purchase across multiple cards, review your cash flow situation. Ask yourself if you can actually afford the purchase or not. If you can’t, consider waiting until you can. Especially if the purchase is to satisfy a “want,” and not a “need.” For example, there is a difference between paying for emergency dental surgery versus purchasing a new television. One is quite literally a “need,” but that new TV? It’s definitely not a necessity. If the expense is out of reach, it is always best to avoid overextending yourself financially.

If you are considering paying with an instalment plan for larger purchases, review the terms carefully. The idea of breaking your purchase into multiple smaller payments may be attractive, but gather the facts. Will you still earn rewards? What interest rates will apply both now and after the promotional period? How long is the promotional period? Knowing the answers to these questions will help you avoid surprises down the line.

Another important step in the planning process is to review the merchant website or application. Some will allow you to select an instalment plan as you check out. Others, though, require you to convert the purchase into instalments on your bank’s website after the fact.

Finally, review each of your statements every month to ensure you do not miss a payment on your billing cycle. By using multiple cards, there is a higher chance that you forget to pay one of the balances. To avoid this, check each statement and be sure to make your payments on time.

When to Avoid Split Payments

Splitting payments isn’t always the smart choice in every situation. For example, some instalment plans come with elevated interest charges or high fees. Consider whether it makes more sense to save first and delay the purchase by a few months.

Another consideration is the perks that you may miss out on. Even if you have selected the best credit card for your needs, some cards only give rewards points, cashback, or purchase protection insurance when the full amount is charged at once. Splitting the transaction into multiple payments or using different cards may result in missing out on these valuable benefits.

Finally, be mindful of your budget. Having charges across multiple cards or tied to an instalment schedule can get confusing. If this approach complicates your cash flow or opens the door to overspending, then it’s a good sign to take a step back. Instead, just consider keeping things simple.

Pro Tip: At times, splitting a payment may mean giving up rewards or paying extra fees. Your best bet is to instead use one card and pay it off in full. This way, you can keep your rewards intact. 

Bottom line: When it comes to unnecessary purchases, if you can’t afford it, then skip it.

Conclusion

Splitting a payment can seem like a clever workaround, but it’s not a good idea without a strategy in place. Whether you use multiple credit cards or take advantage of an instalment plan, both options require careful consideration. When used wisely, split payments can provide breathing room and help you meet minimum spending requirements. But if the fees pile up, or you lose your rewards, that’s a different story entirely.