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American Express Plum Card: 1.5% Rewards and Deferred Payments for Businesses

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If you’re a small business owner, The Plum Card® from American Express OPEN can help with your accounts payable. With perks geared toward businesses with either consistent or unpredictable cash flow, this one might be worth considering.

American Express Plum Card Credit Card
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The Plum Card® from American Express OPEN: Basics and Benefits

Instead of doling out rewards in the conventional sense, The Plum Card® from American Express OPEN gives you a 1.5% early payment discount on the portion of your balance that you pay within 10 days of the statement closing date.

Check out this chart for complete details on the card:

American Express Plum Card Credit Card

The Plum Card® from American Express OPEN

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Pros

  • High rewards rate
  • No foreign transaction fee

Cons

  • Has annual fee

Sign-up Bonus

Paying early pays off: Get a 1.5% discount when you pay early, with no cap on what you can earn back.

Annual Fee

$0 introductory annual fee your first year, then $250

Intro APR Promotions

None

APR

  • Purchase: N/A

Card Details

  • Paying early pays off: Get a 1.5% discount when you pay early, with no cap on what you can earn back.
  • Take up to 60 days to pay with no interest, if you pay your minimum due.
  • Use the power of the Plum Card to buy big for your business.
  • Unlock new opportunities with a spending limit that can grow with your business.
  • Additional Employee Cards at no annual fee - and an early pay discount on employee spending.
  • No Foreign Transaction Fees.
  • Introductory annual fee of $0 for the first year, then $250
  • Terms & Restrictions Apply.

There are a few added features that make The Plum Card® from American Express OPEN a worthy choice for your business:

Flexible capital

The Plum Card® from American Express OPEN is a charge card, which means it doesn’t have a pre-set spending limit. While this doesn’t mean you have unlimited spending, your purchasing power is more flexible than it would be if you had a set limit.

Extra days to pay

Unlike other business credit cards, which typically have a grace period of around 25 days to pay your bill without a late fee, The Plum Card® from American Express OPEN gives you up to 60 days from your statement date to pay part of your balance without incurring interest.

You can take advantage of this by paying 10% of the balance from new activity on your billing statement plus the entire amount of any previously deferred balance by the due date on your current statement. You can then defer payment of the remainder of your balance until the due date on your next statement. Having this extra breathing room can be especially beneficial if your cash flow is irregular.

American Express OPEN

American Express OPEN is a service offered to small business owners with some significant perks:

  • Stay on top of your expenses with ReceiptMatch with Quickbooks.
  • An online bonus mall designed for business owners where you can get a 5% discount or bonus Membership Rewards points with purchases from partners like Hertz, FedEx, Hyatt, Hewlett-Packard and more.
  • Get advice and share ideas with other small business owners on the OPEN forum.

No foreign transaction fees

Unlike many American Express cards, The Plum Card® from American Express OPEN has no foreign transaction fees, making it a good choice if you travel internationally for your business.

The Plum Card® from American Express OPEN: Pitfalls and other possibilities

Every card has weaknesses, and The Plum Card® from American Express OPEN is no different. Consider the following before applying:

You can’t carry a balance

Because The Plum Card® from American Express OPEN is a charge card, you face steep penalties if you don’t pay your balance in full according to the card’s terms. For example, if you’re 30 days past due, you’ll be charged a late fee of 1.5% of the past-due amount, or $38, whichever is greater. A fee of 2.99% of the past-due amount, or $38, whichever is greater, will also be assessed when you are 60, 90 and 120 days past due.

For example, if you have a $50,000 balance that’s 30 days past due, that’s a $750 penalty. That can be a big deal if your company has fallen on lean times.

Rewards are conditional

To earn the 1.5% discount with The Plum Card® from American Express OPEN, you have to pay your balance within 10 days of your statement date. The Capital One® Spark® Cash Select for Business, by comparison, has unlimited 1.5% cash-back rewards regardless of when you pay your bill.

With the Capital One® Spark® Cash Select for Business, you’ll also get a cash sign-up bonus: Earn a one-time $200 cash bonus once you spend $3,000 on purchases within the first 3 months.

If you have some big purchases to make for your business and need more time to pay them off, the Capital One® Spark® Cash Select for Business offers a 0% introductory APR promotion: 0% on purchases until May 2016, and then the ongoing APR of 12.9% - 20.9% (Variable).

If costs are an issue, the Capital One® Spark® Cash Select for Business also has a $0 annual fee and no foreign transaction fees.

Large annual fee

Chase  Ink Cash Business Credit Card
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Having the perks of American Express OPEN and access to more capital comes at a price. The Plum Card® from American Express OPEN’s annual fee — $0 introductory annual fee your first year, then $250 — is high compared with other business cards.

Consider the Ink Cash® Business Credit Card if you’re looking for No Annual Fee but still want to earn rewards. You can also take advantage of the card’s bonus spending categories to get more cash back. Earn 5% cash back* at office supply stores and on cellular and landline phone service, Internet and cable TV; 2% cash back at gas stations and restaurants; and 1% cash back on everything else.

To add to the ongoing rewards, the Ink Cash® Business Credit Card has a sign-up bonus: Earn $200 bonus cash back after you spend $3,000 on purchases in the first 3 months from account opening.

Finally, the Ink Cash® Business Credit Card has a generous 0% introductory APR to give you time to pay off some big purchases for your business: 0% Intro APR for 12 months on purchases and balance transfers, and then the ongoing APR of 13.24% (Variable).

Nerd note: The 5% and 2% cash-back bonus rewards apply only to the first $25,000 spent on the corresponding bonus categories each account anniversary year.

The Plum Card® from American Express OPEN: Is it right for you?

There are two types of business owners who can benefit from using The Plum Card® from American Express OPEN: Those who have enough cash on hand to pay early and get the 1.5% discount, and those who prefer to have more time to pay off their balance than to earn rewards. The benefits of American Express OPEN membership is icing on the cake. But if you’re sensitive to The Plum Card® from American Express OPEN’s high annual fee or your business doesn’t have enough cash flow and you need to carry a balance, you may want to consider another card.

Ben Luthi is a staff writer covering personal finance for NerdWallet. Follow him on Twitter @benluthi and on Google+.


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  • len

    the excerpt below from the above article is false. All charges made during a billing period are discounted if paid by the 10th day after closing regardless of how many payments were applied during the month. The confusion comes in if there is a deferred amount reflected in a bill. The deferred amount must be paid before you can appreciate the discount.

    From the article above
    The 1.5% back is applied only to your balance at the end of each billing period. Payments made earlier than 10 days before your billing date will NOT earn cash back. It’s a little tricky. Basically, to optimize rewards, you need to pay within that 10-day window. Not before. Not after (obviously). The cash rewards will be credited to the next month’s statement.

  • len

    The above comments are false. The cash back is all the previous month’s spend regardless if payments were made during the month. It does get a bit confusing as if one elects to use the 60 day defer, that balance is depicted on the bill and isn’t discounted. If you pay the balance in full within 10 days of the bill date all the charges made during that billing cycle are discounted. The balance in full will include deferred charges from the past. Bottom line is you basically have to bring the account to 0 to begin to appreciate the discount. You cant defer one statement and then discount the next without clearing the deferred amt. I have a multi mil spend on this card and love it. Its real cash that is applied to the next statement. No BS points. I actually have an older version that gives back 2%.