Plum Card from American Express Offers Small Business Owners Discounts for On-Time Payments and Chance at Interest-Free Revolving Balances
By Justin McHenry
American Express last week introduced a very interesting credit card for the small business market. The Plum Card aims to help small business owners who can’t get “trade terms” by offering discounts of up to 2% on early payments as well as interest-free deferrals of up to two months when cardholders pay off at least 10% of their balances in the first month. Business owners pay with The Plum Card and then receive terms closer to what they’d enjoy when paying invoices on credit. The goal is to reward early payments while giving business owners slack when cash flow issues make immediate payment difficult.
Established businesses often receive discounts for paying vendor invoices early, but others can’t get credit at all and must pay up front if their businesses are too small or don’t have a long track record. The Plum Card essentially bridges the gap by paying the vendor immediately while giving more lenient credit terms to the cardholder.
Cardholders that pay their balances in full within 10 days of the end of a billing period will receive the early pay discount, which equates to a one-percent rebate on balances of under $5,000 and a two-percent rebate on balances over $5,000.
American Express sees the card as being targeted especially toward businesses in construction, retail, wholesale, IT/Solution providers, the auto-care after market and others.