American Express Open unveiled its new Plum Card at the The Inc. 500 Conference and Awards Ceremony in Chicago. The new plum-colored card is aimed at small business owners including construction, retail, wholesale, IT/Solution providers, the auto-care after market and others. These businesses traditionally have high materials costs and unpredictable cash flow.
The Plum Card is a “new trade terms Card” intended to help small business owners better manage cash flow and free up working capital. The Plum Card provides small business owners with flexible trade terms – the option to defer payment up to two months or receive a 2% early pay discount for just about everything purchased with the Card.
Cardholders must pay balances in full within 10 days of the end of the billing period to receive the early pay discount (2% discount on balances of $5,000 or more; 1% discount on balances of $5,000 or less), or defer payment up to two months (no interest or finance charges) by paying 10% of the balance by the date indicated in the billing statement. Cardmembers have the flexibility to choose which cash flow management option is best for their business each month.
So, why is this a big deal?
Two-thirds of all small business owners report frequent or periodic cash-flow problems. Nearly one-third of those small business owners attribute their cash flow challenges to difficulties collecting payments from clients.
The Plum Card is a must-have for any small business owner who has ever attempted to negotiate terms with suppliers. If you’ve done it, you know how difficult it is to get favorable terms. Most suppliers want to be paid “net 30″, regardless of whether you have collected from your client. Most offer no early payment discounts. Any small business owner can tell you that maintaining enough cash on hand to operate the business and to pay suppliers while also trying to “persuade” your clients to pay you on time is like walking a tightrope.
The Plum Card provides small business owners the ability to get favorable trade terms automatically (no negotiations) on every Card purchase, and the ability to choose the terms most favorable to them each month based on their cash flow.
American Express is initially releasing only 10,000 Cards. Each of this year’s Inc. 500 honorees were the first to be offered The Plum Card.
Request an application (Applications are not currently available, but you can join the waiting list now).
Other Plum Card benefits:
- If you choose to take the early payment discount, you’ll receive the 1-2% discount as a credit on the following month’s statement.
- If you defer payment, a payment of 10% of the full balance is due during the first billing cycle. Then, you can take up to 2 months to pay the remaining balance.
- At the end of the deferral period, you are expected to pay the bill in full.
You can choose your own billing cycle! Receive your billing statement at the beginning, middle or end of the month. - No pre-set spending limit. Your based on spending and payment history. Your purchasing power adapts based on Card your spending and payment history and can grow over time.
First year fee-free, $185 annual fee thereafter; fee-free additional Card ideal for a purchasing manager/office manager (First additional Card is free, all additional are $45) - Easy online card management: Customizable online tools for expense management, reporting and to view payment options/history. Online tools that will help small businesses get the most out of the product, including: Early Pay Reminder, E-statement and Online Bill Pay.
- Automatic savings at select travel and service providers, and business suppliers like Delta, JetBlue, Fedex Kinko’s, and Hyatt. For more information, visit OpenSavings.com.
- Retail and travel protections such as Global Assist, Car Rental Loss & Damage Insurance, Purchase Protection Insurance, Travel Accident Insurance, American Express Card Baggage Insurance, Buyers Assurance Plan, Automatic Bill Payment, Express Cash Emergency Card Replacement, Emergency Check Cashing, and 24-hour customer service.
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