When you run a small business, a lot of things are unpredictable. Someday you could land a huge customer that will trigger a month of record sales. The next day, you could lose a long-standing source of income that you have relied on for years. Fortunately, American Express designed their Plum Card® with these small business cash flow challenges in mind.
If cash flow is tight in a given month, the Plum card allows you to defer part of your payment for 60 days – without interest. Or, in months when the cash flow is steady, you can earn 1.5% cash back if you pay off your balance sooner. In addition to these flexible payment options, the card has several other great features that are great for small business owners.
In this American Express Plum Card review, we’ll cover everything you need to know about the card, including the features, pros and cons, and frequently asked questions. Read on to find out more and decide if the Plum card is right for your business.
What are the advantages and disadvantages of the Plum Card?
1.5% cashback when you prepay your balance
Defer your payment for up to 60 days, interest-free
No foreign transaction fees
No predefined spending limit
How does the payment deferral function work with the American Express Plum Card?
For most cardholders, the ability to defer bill payment will be the highlight of the American Express Plum Card. This feature allows you to keep an interest-free balance on your card for up to 60 days, provided you have made your minimum payment by the payment due date.
This may not seem like an important characteristic to some, but it could make a big difference if your monthly cash flow tends to be unpredictable. If you have this card, you can prioritize your most important business expenses first and have more time to pay your other bills.
How to earn cashback with the American Express Plum Card?
American Express will reward you for paying your card on time, even if it is only a part of the total balance. Every time you pay off your balance at least 10 days before the statement closing date, you’ll get unlimited 1.5% cash back on the amount you paid. After we receive your payment by American Express, the cashback credit will be applied to your next statement.
However, it’s worth mentioning that you’ll need to spend a decent amount of money for the cash rewards to offset the annual fee of $ 250. In fact, you’ll need to charge almost $ 17,000 on your Plum card each year (and pay it off sooner) to break even the annual fee.
Can you earn points or rewards with this card?
Unlike many business credit cards, the Plum card from American Express does not allow you to earn points or rewards. Likewise, there are no bonus categories for spending – just the 1.5% unlimited refund offer for prepayments.
How does the preset spending limit work?
It is important to mention that the Plum card is technically a payment card, not a credit card. With these types of cards, there is no preset spending limit. Instead, American Express adjusts your purchasing power each month based on a number of factors, including your card usage habits, credit history, and financial situation.
Does the American Express Plum Card include a welcome offer?
Some people may be eligible for a special signup bonus with the American Express Plum Card. Currently, new cardholders can get a credit of $ 500 on their statement after spending at least $ 15,000 in the first three months of membership. You can get more details on the company’s website.
What other benefits does the American Express Plum card offer?
In addition to the flexibility of early and late payments, there are several other benefits that small business owners might appreciate, including:
No foreign transaction fees
No annual fees on additional cards for employees
Possibility to define your own billing cycle
Access to card management tools including American Express Business App and Vendor Pay by Bill.com
Car rental insurance and access to the Global Assist 24/7 hotline
Additional American Express services, including purchase protection, extended warranty, and dispute resolution
At the end of the line
All things considered, the American Express Plum Card is probably just a good choice for a small percentage of small business owners. Specifically, we suggest you review the card if your monthly cash flow and expenses fluctuate significantly from month to month. In these scenarios, the Plum card could be an attractive option as it allows you to defer payments and does not have a preset spending limit.
For anyone who doesn’t need these features, there are plenty of other small business credit cards to consider, including those with lower annual fees and better rewards programs. We’ve included some of our top recommendations below.
Who can apply for a business credit card?
You will need to be a business owner to apply for a business credit card. Fortunately, the definition of the term “business” can be quite broad and include freelancers, people who sell products online, and even guardians or dog walkers. As long as you generate some type of income through your work, you could be considered for a business credit card.
What Are the Special Benefits of Small Business Credit Cards?
If you have your own business, it’s important to keep your personal and business expenses separate. With a business credit card, you’ll know exactly what you’ve spent on work-related expenses instead of having to sort through your personal credit card statements and separate business expenses.
Other benefits of corporate credit cards include a higher spending limit, points and cash back programs, and additional cards for employees.
How are payment cards different from credit cards?
Payment cards and credit cards share many similarities, and the terms are sometimes used interchangeably. However, there are a few important differences to note between the two types of cards.
In particular, payment cards do not allow you to carry a balance and must be paid in full at the end of each billing cycle. (One slight exception: American Express’s Plum card allows you to defer your payment for up to 60 days.) And unlike credit cards, payment cards don’t have a preset spending limit each month.
What’s the best business card for small business owners?
The best credit card for your small business will depend on a number of factors, including the type of business, your financial goals, and the features you need for your credit card.
For example, if you are looking for a card with no annual fee, you might consider the American Express Blue Business Cash ™ card. If you want to be rewarded for your business expenses, check out the Capital One Spark Cash Plus or the Business Platinum Card® from American Express.