Credit card issuers have a long-standing tradition of naming their cards after precious objects such as gold, platinum, sapphire, and diamonds.
So you can imagine my surprise when a company rolled out a card named after a fruit.
The Plum Card® from American Express OPEN is offered to businesses that may need to a little extra time to pay a balance, but wish to minimize their interest payments.
- Modified Charge Card. This product is not a credit card, it is a charge card. As such, customers must pay their balance in full to avoid default. Because of this, there is no published interest rate. Unlike most charge cards, however, this one gives customers two payment options. Businesses may receive 1.5% cash back for making payment in full within 10 days of their statement closing. Additionally, they may pay their entire balance within 60 days without incurring interest, so long as they pay at least 10% by the original due date. Cash back is earned as a statement credit that is applied to the account during the following billing period.
- Partner Bonus Credit. This card offers a $200 statement credit towards business services with select partners such as Monster.com and Yahoo.
- Purchase Protection. Items bought with this card are covered for up to 90 days from purchase against accidental damage or theft for up to $1,000 per occurrence and $50,000 per calendar year.
- Return Protection. If a merchant won’t accept a return, American Express will refund you up to $300 per item for up to $1,000 a year.
- Open Savings Discounts. This card is part of the American Express OPEN Savings program that can earn discounts at member companies including Hertz, Fedex Office, Hyatt, and several of the Marriott brand hotels. The typical discount is 5%.
- Travel Assistance. This card comes with a range of benefits for travelers including roadside assistance, baggage insurance, and emergency travel support.
- Annual Fee. The Plum card has an annual fee of $250, but it is waived the first year.
- Foreign Transaction Fee. Like all American Express cards except their Platinum cards, this card has an egregious 2.7% fee on all purchases processed outside of the United States.
- Flexible Payment Options. While you cannot carry a balance like you can with a credit card, you do have a two-month long, interest-free grace period on 90% of your balance. This can help to smooth out short-term bumps in your cash flow without paying interest.
- Early Bill Pay Savings. When a company pays its balance within ten days, this card becomes a respectable rewards card with 1.5% cash back received as a statement credit. While it is normally a good practice to pay bills near the due date to maximize the interest accrued on that payment, cardholders have a strong incentive to make their payments immediately.
- Fee Credits. Clearly, American Express is trying to promote their partners by offering credits towards their services. That said, these companies can provide valuable business products that are worth trying, especially when it won’t cost you anything.
- Travel and Purchase Benefits. This card is not focused on business travelers like their Gold and Platinum business cards. Nevertheless, it still offers a generous range of travel insurance and protection policies.
- High Annual Fee. The $250 annual fee is quite high as there are many business cards from American Express and others with no annual fee. Companies must closely evaluate if the benefits they receive and actually use are worth this fee.
- Foreign Transaction Fees. With a 2.7% fee on all purchases made outside of the country, this is a card to leave at home whenever you are planning to travel outside the country. International travelers should look for cards without foreign transaction fees.
- Cannot Carry a Balance for More Than Two Months. Even though you get sixty days of interest-free financing, this is still not a credit card. Failing to pay your balance in full after two months will make your account delinquent.
- No Membership Rewards Points. Many business cards from American Express are eligible for their highly regarded Membership Rewards program, but the Plum card is not. Customers who pay their balance in the ten-day period will earn the 1.5% cash back. This is better than a single Membership Rewards point used for cash back or gift cards, but it is not as valuable as a point used towards an airline mileage award for a premium class international ticket.
Businesses and sole proprietors use credit and charge cards to organize their purchases and earn some rewards. The American Express Plum Card is a unique product that strikes a balance in several ways. It blends the payment features of their charge cards and their credit cards. It is also a hybrid of a cash back rewards card and a travel benefits card. If these features and benefits closely meet the needs of your company, the Plum card can indeed be a sweet deal.
Do you use The Plum Card® from American Express OPEN for your business? How have you utilized the benefits and rewards?
Editorial Disclosure: This content is not provided or commissioned by any bank, credit card issuer, hotel, or airline. Opinions expressed here are the author’s alone, and have not been reviewed, approved, or otherwise endorsed by any of these entities.