The Bottom Line: This card makes sense for businesses that need wiggle room on their accounts payable. Others should look for a straight-up rewards card.
Quick FactsView rates and fees
Waived first year
- 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.
Pros & Cons
High rewards rate
No foreign transaction fee
Has annual fee
Alternate Pick: Straightforward rewards
American Express® Business Gold Card
Get points rather than payment flexibility
This card has no preset spending limit and gives you 4X Membership Rewards® points on the 2 select categories where your business spent the most each month and 1 point per $1 on everything else. The annual fee is $295.Read our review
Unlike a lot of cards aimed at entrepreneurs, The Plum Card® from American Express isn't simply a consumer rewards card dressed up in small-business attire. Its signature benefits are realized when you pay, not when you spend. If your business has uneven or inconsistent cash flow, The Plum Card® from American Express can help be a useful tool for managing working capital. It's not cheap, though. After the first year, the annual fee gets pretty pricey.
The Plum Card® from American Express: Basics and Benefits
Card type: Small business.
The Plum Card® from American Express is a charge card, which means it doesn't have a pre-set spending limit. While this doesn't translate into unlimited spending, your purchasing power is more flexible than it would be if you had a set limit like with a credit card.
A charge card also doesn't allow you to carry a balance from one month to the next. Your balance is usually due in full when you receive your statement. But this is where The Plum Card® from American Express is distinctive.
Flexible payment options
Every month, you have a minimum payment due, which is equal to 10% of your new charges plus any previously deferred balance. You must pay this amount by the due date or you'll be charged a late fee. Everything else, you can either pay or defer:
Amounts paid within 10 days of your statement closing date earn a 1.5% discount on the amount paid. The discount appears as a credit on your next statement. So if you paid $10,000 early enough to qualify, you'd get a $150 credit the next month. Note that the date that matters here is your closing date, not the due date. The closing date is when the billing period ends and your statement is prepared; it's a few weeks before the due date.
Amounts paid more than 10 days after your closing date but before your due date will not earn a discount.
Anything not paid by the due date will be carried forward to the next statement without interest. This can give you as much as 60 days to pay for a purchase without interest. This compares with the roughly 25-day grace period offered by typical business credit cards.
The discount for early payment and the extra time for deferred payments can create breathing room for businesses with irregular cash flow.
American Express Business
American Express Business is a service offered to small business owners with some significant perks:
Stay on top of your expenses with ReceiptMatch with Quickbooks.
Shop at 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 in the forum.
No foreign transaction fees
Unlike many American Express cards, The Plum Card® from American Express has no foreign transaction fees, making it a good choice if you travel internationally for your business.
The Plum Card® from American Express: Pitfalls and other possibilities
Every card has weaknesses, and The Plum Card® from American Express is no different. Consider the following before applying:
You can't carry a balance
Because The Plum Card® from American Express is a charge card, you face steep penalties if you don't pay your balance 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.
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 is in a dry period for cash flow.
Rewards are conditional
To earn the 1.5% discount with The Plum Card® from American Express, 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: Plus, a one-time $200 cash bonus once you spend $3,000 on purchases within 3 months from account opening.
If you have some big purchases to make for your business and need more time to pay them off, theCapital One® Spark® Cash Select for Business offers a 0% introductory APR promotion: 0% on Purchases for 9 months, and then the ongoing APR of 15.24% - 23.24% Variable APR.
If costs are an issue, the Capital One® Spark® Cash Select for Business also has a $0 annual fee and no foreign transaction fees.
The annual fee is high
Having the perks of American Express Business and access to more capital comes at a price. The annual fee on the The Plum Card® from American Express — $0 for the first year, then $250 — is high compared with other business cards.
Consider the Ink Business Cash℠ Credit Card if you're looking for a $0 annual fee but still want to earn rewards. You 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. (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.)
To add to the ongoing rewards, the Ink Business Cash℠ Credit Card has a terrific cash sign-up bonus: Earn $500 bonus cash back after you spend $3,000 on purchases in the first 3 months from account opening..
The Plum Card® from American Express: Is it right for you?
There are two types of business owners who can benefit from using The Plum Card® from American Express: 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. And some business owners fall into both categories at different times. But if you're sensitive to annual fees or your business will need to carry a balance, consider another card. To view rates and fees of the The Plum Card® from American Express, please visit this page.
NerdWallet reviews are the result of independent research by our editorial team while cardholder reviews are contributions from independent users not affiliated with NerdWallet. Banks, issuers and credit card companies are not responsible for any content posted on the NerdWallet site, nor do they endorse or guarantee any posted comments or reviews.