Preview – Years ago, have a credit card that was “gold” was prestigious, then it was the “platinum” card, then the “black” card. I guess we are running out of colors because now, Amex have come up with the “Plum” card – kind off reddish plum color. So what is the fuss with this card? Let’s find out.

Card Details – The Plum Card is actually found in the “business credit card” section on Amex website. The Plum Card has 2 key features :

No Pre-set Limits – Like many Amex charge card, there is no pre-set spending limits for the Plum Card.

Open Savings – Like all Amex Business Cards, you can get discounts at OPENSAVINGs merchants.

Verdict – The Plum Card is unique among business credit cards in that it functions more like a trade line. Typically, a business owner might have a business credit card with a line of say $50,000. This will be considered by most as a line of credit. If the business owner chooses to carry a balance, he or she will have a float for about 20 days (standard grace period) and they will be charged an interest (the APR) if they do not pay their balance in full on the billing date. The The Plum Card® from American Express OPEN instead allows you to defer paying your balance for longer than the usual 20 day grace period. This looks more like a “proper” line of credit.

If the business owner pays in full, they will earn cash rebates for that month, which is higher than most business cash back credit cards and there is no cap on how much rebates you can earn (note: many business cards now cap the rebates you can earn on things like gasoline etc).

So is the annual fee worth it. Well, this is how I would look at this card. For those who pay in full, this is a great card because you get cash rebates on your purchases. I view the annual fee as a very cheap option to get interest free finance for more than a month if the business ever needs one. For the business owner that requires a line of credit, this is a great card (in additional to other lines of credit, working capital from banks etc) to have and you also get to diversify your sources of working capital. Even if your business is such that you pay in full every month, it is a cheap option to have interest free line just in case your business ever needs it.

To sum up, this is a business card that I would recommend any business owner to consider. Amex originally sent out invitations to 10,000 charter members and it is now open to more business owners. They do require very good credit history and preferably a business that has at least 6 figures in revenue.

This entry was posted on Friday, April 10th, 2009 at 06:00 and is filed under Credit Cards FAQ. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.