The Truth About Credit Cards.com

In just a couple days the “American Express Plum Card” will be released, promising to revolutionize the way business owners use credit cards.

Here’s how the credit card works:

Say you charge $5,000.01 on your credit card for business expenses in a given month, and you have the available funds to pay it all off immediately.

If you pay off that balance in full within 10 days of your billing cycle date, you’ll get a 2% “Discount”, or roughly $100 back in the above example. That $100 will work as a credit, and will be applied to the following month’s statement.

If you only make purchases at or below $5,000, a 1% “Discount” will be applied to eligible purchases.

Note that eligible purchases do not include returned items, American Express Gift Cheques or American Express Travelers Cheques, or deferred payments.

You can also defer credit card payments by as much as two months from the statement closing date, without paying interest or finance charges.

Here’s how the deferred payment option works:

Say you charge $5,000 on your American Express Plum Card. Once your statement arrives, you must pay at least 10% by the “Please Pay By” date on your billing statement.

So long as 10% is paid by that due date, you can carry the remaining balance and pay it off at the next month’s “Please Pay By” date without incurring any finance charges or interest.

This is assuming you aren’t carrying any previous balances from prior months.

To sum it up, the Plum Card is about flexibility and managing cash flow.  It appears the move is a bid for American Express to capture more of the business to business market where cash is sometimes king.

But before you get too excited, take note that the credit card is intended for businesses with revenues in the 6-7 figure range.

There’s even an application waiting list, though that’s likely just part of the buzz machine.

The annual fee for the American Express Plum Card is $185, $0 for the first additional card, and $45 for each additional Plum Card.

The late payment fee varies from state to state, from zero to the greater of $39 or 1.5% of the delinquent balance, and $39 or 2.99% of a seriously delinquent balance.

The credit card carries no pre-set spending limit, and is likely reserved for businesses with great credit.