The “Buy Now, Pay Later” (BNPL) fad is not new. But it is creeping into the mainstream credit card world. And U.S. Bank has taken it to a new level with a recently unveiled credit card built entirely around this purchasing method.
The U.S. Bank Split™ World Mastercard® promises customers a chance to buy items with no APR interest rates and to pay them back in “split” payments over 3-, 6- or 12-month installment plans.
The 3-month plan even touts no plan fees.
On the surface, that may sound more appealing than using a traditional credit card, which has APRs that take effect shortly after you make your purchase if you don’t pay your bill in full.
But money expert Clark Howard says this is a “trick” that can lead you to overspend on items you don’t need and can actually leave you owing the credit card issuer more money on one of these long-term plans.
U.S. Bank has a solid menu of rewards credit cards that we mention often in our content, but this one simply is not for us.
Let’s explore why we think this one is a bad idea for your wallet.
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How the U.S. Bank Split™ World Mastercard® Works
U.S. Bank has been marketing this new credit card with the following pitch:
“No interest and no annual fee on all purchases for a 3-month payment plan. All purchases are automatically divided into 3 payments and placed into a payment Plan to be paid back over 3 months, with no plan fee.”
Unlike a traditional credit card that charges you APR interest if your outstanding balance of all your purchases is not paid in full at the completion of each billing cycle, the U.S. Bank Split card skips the APR interest and automatically breaks your purchases up into individual payment plans.
If that sounds too good to be true, it’s likely because several issues lurk beneath the surface.
Here’s a quick rundown of how this card works:
- When you make a purchase, it is automatically put into a 3-month payment plan with no plan fee.
- Purchases of $100 or more are treated as their own plan and require individual payments.
- Purchases under $100 are pooled into a single “Small Purchase Plan” for that billing cycle.
- The Small Purchase Plan locks into a 3-month repayment period and may not be extended. You’ll be subject to late fees if you do not pay the full amount as scheduled.
- Individual purchase plans ($100 or more) are eligible for a 6- or 12-month extension. Choosing one of these plans will activate a plan fee, which can vary from customer to customer. The base fee for a 6-month plan is 1.5% of your purchase total per month.
You may have already spotted the game here: They entice you to spend beyond your means, and then make it easy to put off paying your balance with these extended installment plans that carry percentage fees.
3 Reasons This Is a Bad Idea
After reading through how this card works, you may be wondering: Why is this such a bad idea?
Clark could passionately run through a laundry list of reasons he doesn’t want you to bring this type of credit card into your life, but I’ll give you the highlights:
1. This Card Encourages Overspending and Poor Financial Decisions
Let’s start with the basics: This card turns every single purchase you make into a mini short-term loan.
By saying, “hey, you don’t owe us anything today and you can pay us back gradually over time” on every single purchase that you make, this card is opening up the undisciplined consumer to spend more than they can afford without realizing any immediate pain.
As those individual plan payments come due, they’re hoping that you’ll only then realize that you’ve overspent and opt to extend your payment plans into the longer installment plans that charge fees.
This is a gateway to making you a long-term debt spender with their card.
Team Clark believes that rewards credit cards can be a great payment method for responsible consumers, but only if you use cash to pay off your purchases in full as soon as the initial bill comes due.
You’ll notice that with this card, you can’t clear the balance at the end of the month, and you earn no rewards for your purchases.
Read Clark’s 7 rules for using a credit card to better understand our stance on a healthy relationship with credit cards.
2. Those Installments Could Crush You with Fees
They market 3-month installment plans with no fees, but the data shows they’ll convert many well-intentioned buyers into extended plans for 6- or 12-month periods.
And that’s where they’ll get you.
The fine print of this card says that installment plans of 6 months or longer will be subject to a minimum fee of 1.5% of the purchase amount per month.
Let’s take them at their word on 1.5% being a standard monthly installment fee. If you made a $1,000 purchase on a 6-month installment, that’d work out to $15 per month in fees. That’s $90 in fees over 6 months, which is roughly the equivalent of 18% APR.
And that’s the minimum that they’d charge you. The fine print says that individual customers will receive customized offers to extend plans to 6 or 12 months. That means your actual fees could be well in excess of the advertised 1.5% per month.
Yikes!
Even the 3-month installment plans are not without risk:
- The “Small Purchase Plans” cannot be extended. So, if you can’t pay them off in time, you’re staring at late fees.
- The fine print says that plans cannot be shortened. This is likely to make you jump through the hoops of monthly installments on all of these mini loans in hopes that you’ll slip up and miss paying one of them on time.
3. The Data Indicates “Buy Now, Pay Later” Leads to Regret
If you don’t believe us, believe the people who are actually using Buy Now, Play Later in their lives.
A May 2025 survey conducted by Bankrate found that 49% of “Buy Now, Pay Later” customers had some sort of issue with their experience.
Some of the more troubling numbers were that 24% indicated that access to BNPL led them to “spend more than they should have,” and 16% missed an installment payment that led to more fees. And that’s just the people who were self-aware enough to admit they overspent and/or were willing to admit the embarrassment of a missed payment.
Similarly, a recent study conducted by The Motley Fool had some discouraging statistics.
It cites rising regret with BNPL, with “over 25% of Americans regret using buy now, pay later due to unexpected costs.” It also says there is an increase in late payments when compared to earlier surveys for the study. The latest numbers say 24% of BNPL users polled have missed payments.
Do you have experience with “Buy Now, Pay Later” programs? Do you know someone with this credit card? We’d love to hear about it in the Clark.com community.
