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American Express has built a stellar reputation as a bank for small and large businesses across the world. Particularly aimed for entrepreneurs, the American Express Plum Card is an exceptional option.
Though, this consumer’s reward card is much different from other business cards from American Express. Capitalizing on the benefits of the American Express Plum Card only happens when you make payments instead of spend money.
If inconsistent cash flow is a problem for your growing business, then this card is a great option to consider to help you augment your working capital. A noticeable downside is that this card isn’t cheap.
After the first year, you will be required to pay a rather exorbitant annual fee. This American Express Plum Card review will breakdown the basics, benefits, and drawbacks, to help you make a smart financing decision for your business.
American Express Plum Card: The Basics
Below is some helpful information surrounding the American Express Plum Card for entrepreneurs and small business owners.
- Annual Fee: $0 for the first year. After the first year, the annual fee jumps to $250. There isn’t an added cost for employee cards.
- Type: Small Business card
- New Cardholder Offers: None
- Rewards: None
- Foreign Transaction Fees: $0
- Interest Rate: $0. You will be required to pay the entire balance at the conclusion of each billing cycle.
- Rates & Fees
As you can see, the American Express Plum Card doesn’t provide much benefit if you spend instead of pay. However, the waived interest rate makes this card an attractive option for entrepreneurs looking to manage their cash flow.
American Express Plum Card Review: Benefits
If you’re considering applying for the American Express Plum Card, here are some great benefits you can take advantage of:
This card does not come with a set spending limit. Although this doesn’t mean that you will have an unlimited spending amount, your purchasing power and capital potential could be much higher than if you applied for a standard credit card.
Cardholders also don’t have to carry a minimum balance each month. When you receive a statement at the end of a billing cycle, your balance will be due for payment. This is actually an area where the American Express Plum Card holds a strong advantage.
Multiple Payment Options
Again, a payment will be due at the end of each month’s billing cycle. This is usually equivalent to at least 10% of your new expenses in addition to a previous balance. You must pay this amount in full by the due date, or you will be charged a late fee.
For all other charges, you have the option to pay or defer the costs. Here is more information regarding payment options:
- American Express Rewards Early Payments – You can earn a 1.5% discount on the amount you pay if you complete your balance 10 days before the closing date of your statement. This discount will be reflected as a credit toward your next statement. For example, if you’ve paid $10,000 10 days before the closing date, you’ll receive a $150 credit. The closing date is when your statement is prepared the moment the billing cycle ends, not the due date.
- On-Time Payments Don’t Receive Discounts – If you pay your full balance more than 10 days after the closing date (before the due date), then you will not receive a discount credit.
- Late Payments Aren’t Heavily Penalized – If you don’t pay your full balance by the due date, it will be reflected on your next statement without any charged interest. This will allow you to pay for a purchase without interest for up to 60 days. This is comparable to the grace period of most standard business credit cards.
Helpful discounts for early payments and leniency on deferred payments can help business owners achieve flexibility when enduring irregular cash flow. Other benefits include:
Added Benefits with American Express Business
Small business owners can take advantage of perks through American Express Business, helping them to:
- Use ReceiptMatch and Quickbooks to keep track of expenses.
- Receive bonus rewards and up to a 5% discount when shopping at approved partners such as: FedEx, Hewlett-Packard, and more.
- Access a small business owners’ forum to collaborate, share ideas, and receive advice.
$0 Foreign Transaction Fees
The American Express Plum Card doesn’t charge a foreign transaction fees unlike the company’s other business cards. This makes this business card a great choice if you frequently travel abroad for business.
American Express Plum Card Review: Drawbacks
Every business card has its share of flaws, and the American Express Plum Card is no exception. Here are a few drawbacks to consider before applying:
Customers Can’t Hold a Balance
According to the policies of this business card, you can face stringent penalties if you don’t pay your balance. If you’re more than 30 days late, you’ll be charged $39 or 1.5% of the delinquent amount, or whichever amount is greater.
If you owe $50,000 on this business card, you may be forced to a $750 late fee based on this math. This is not an ideal situation to be placed if you’re dealing with inconsistent cash flow.
The Annual Fee is Very Expensive
Having access to nearly unlimited capital comes at a rigid cost. For the first year, your annual fee is $0. After that, you’ll be required to pay $250 annually. This is an expensive rate compared to other business cards.
The Benefits May Not Always Be Ideal
With this business card, you can earn a 1.5% discount when you pay your balance 10 days before the closing date. With other business cards, you can earn a discount or reward regardless when you make a payment.
Rates & Fees
American Express Plum Card Review: The Verdict
Overall, only two types of entrepreneurs will find the AMerican Express Plum Card to be useful:
- People who have enough capital to pay their balance early and earn a discount.
- People who want to take advantage of a longer period to pay their balance in full.
Some business owners can align with both categories at the same time. However, if your business needs to carry a balance and you don’t want to pay a high annual fee, then this card may not be best for you.