The American Express Blue for Business Credit Card allows some cash flow flexibility for business owners. Although it may seem that the card just offers a quick solution, it may not be the go-to card for everyone. Customers will need to apply discipline when using the card.
American Express may not have the largest market share but does command the biggest spend. According to an online article on CardHub entitled Market Share by Credit Card Network, American Express is accountable for the majority of the annual and monthly purchase/spending volume.
- Visa: $ 4,085
- MasterCard: $ 3,401
- American Express: $12,517
Although Visa and Mastercard dominate the market with 329 million and 192 million users respectively compared to the American Express cut of a mere 58 million, total spend provides some insight into the clientele enjoyed by American Express. These impressive financial returns allow board members to reap the rewards of a 10% dividend increase.
Find out how this card compares to the offering from Ally Bank.
History of American Express
American Express was founded in 1850, but it wasn’t until 1890 when they decided to branch out into an area that put them in direct competition with their biggest clients, the banks. A few changes in their service offerings propelled by the needs created by wars and changes in the economy allowed them to launch their very first credit card in the 1950’s, the Green Card. With some of the biggest names in the entertainment industry promoting the American Express cards, their exclusivity status served as it’s biggest customer hook.
Brand Positioning and Untapped Target Markets
The perception that only the affluent, established and corporate-like businesses form part of the American Express strategy is torpedoed by the latest initiatives of the brand to engage small business and other market segments previously out of reach for the brand. These include single moms and the unbanked.
With the self-employment rate remaining fairly consistent over the last two decades, it only makes sense that credit card companies would want to tap into this market. Individual credit card options allow consumers to choose the right product for their particular business.
Charge or Credit?
This is the ideal solution for the business owner who has cash flow constraints during the month and needs to purchase stock or materials to get the job done. There is no interest payable on this card as the balance is settled at the end of the period (one month).
- Pro: Provides cash for the mid-month purchases, alleviating cash-flow constraints.
- Con: Penalty interest is quite high when the balance is not settled within the specified time period. Can be stressful when customer payments don’t take place as they should.
Business owners who need to purchase one-off items that cannot be financed in another way such as unusual stock purchases or equipment will find this to be a good alternative. The installments range between 5% to 10% of the outstanding balance and the credit is of a revolving nature.
- Pros: Provides a quick means to finance unusual items that don’t occur on a monthly Small installments ensure less pressure on the cash flow.
- Cons: Expensive means of finance and alternative routes should be explored first. The chance of using the card for unnecessary spend is high.
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Features of the American Express Blue for Business Credit Card
Annual Fees, Interest, and Rewards
Often the biggest comparison between the different types of credit cards are the fees and interest rates. Credit card companies are in a continuous price war to see who can attract customers with the most attractive offer. This particular credit card has an interesting offering for business owners:
- 0% Annual fee for the main member and each additional Employee Blue for BusinessCredit Card.
- The option to carry a balance each month with interest.
- A 0% Annual Percentage Rate for the first 9 months of the card. After the 9 months, the APR for the remainder of the life of the card will be set at 11.49%, 15.49%, or 19.49%. These are variable rates and are determined during the sign-up period of the card and will be based on the creditworthiness of the client.
- Membership Rewards®Points that vary according to the eligibility of the purchases, as well as bookings through the American Express Travel website.
- Purchase protection
- Car Rental Loss and Damage Insurance
- Roadside Assistance Hotline
- Global Assist®Hotline
- Baggage Insurance Plan
- Travel Accident Insurance
- Extended Warranty
Who Will Benefit From Using This Card?
Business owners who do a lot of traveling will find the benefits to suit their needs. There are many added extras that make traveling simpler. This is also the ideal card for those who wish to limit their spend and have payment flexibility. Points can also be used towards business spend.
There are also other considerations where credit cards are concerned, which include:
- Better record-keeping than the use of cash. This allows the bookkeeper or accountant to provide financial statements at a faster turnaround time.
- The opportunity to increase the credit rating of the business.
- Better control over the finances as each user will have an itemized statement.
- Control over spending as each card will have a limit.
- Flexibility for staff members who need to make purchases on a regular basis.
- Safer to carry than cash.
- Limit on the card will prevent massive spend.
- Inability to draw cash from the ATM, which protects the business and staff member.
Find out whether this card offers as many benefits as some of the business cards offered by Banco do Brasil.
How To Apply for the American Express Blue for Business Credit Card
The steps are simple and easy to follow. There is no need for customers to go to a bank to fill out reams of applications. Instead, the entire process is online and an assessment takes place immediately.
Simply visit the American Express website and click on the "apply" button.
Complete the relevant information.
Await the 60-second decision.
The process seems simple enough, yet there is the chance that they will require further information in order to finalize the decision. Applicants also have the option of applying for the card via phone.
Reasons Why I Would Recommend this Card
In comparison to many of the other business cards on the market, the pricing on this one is fairly low as there is no annual fee payable. The interest only kicks in from month 9, which is ideal for those who are in a position to pay a costly item off as quickly as possible. The allocation of a separate card to each employee will curb spend as a different limit can be set for each card. Cards receive individualized statements, which will prevent overspending. Finally, there are many travel benefits for the business owner that includes various types of insurances.
Issues that Concern Me About this Card
When the interest rate kicks in at a hefty 11.49% to 19.49% after month nine, the added expenditure might be a financial burden on the business, especially if the financial outlay for that period was high. Also, a credit card only requires a minimal payment every month and the credit is of a revolving nature. This tends to feed the perpetual debt cycle. Unless a business owner is on top of the statements every month and only purchases items that are needed for the operation of the business, the card debt can heap up to exorbitant amounts.
What Others had to Say About the American Express Blue for Business Credit Card
The overall satisfaction rating of the card is fairly high, and areas of improvement include the use of the Membership Rewards® Points. The payment cycles are determined by the customer, which provides transparency from the word go. Although this is a prestigious brand, there is a good chance that many consumers will have a Mastercard or Visa in their wallet as well, due to the additional charge merchants incur through American Express.
Furthermore, the cost for merchants run between 2% to 3% for Visa and Mastercard, and a hefty 3.5% for American Express. Finally, this additional fee can be burdensome on businesses, which is why so many businesses turn customers away.
My Rating of the American Express Blue for Business Credit Card: 7 out of 10
The low fees and impressive interest offering sets this card head above the rest of the business card offerings currently on the market. There are some areas of improvement, such as benefits that extend beyond traveling. This card would have received a higher rating had it not been for the low acceptance rate. This causes the need to carry a backup Visa or Mastercard when traveling.
Furthermore, although American Express is accepted at most major retailers and in major metros and locations, those off-road adventures looking for some unique stock will not sit well with this brand. Finally, the reason for the non-acceptance is not just a matter of the merchant machines not being geared for the card. It's a matter of cost.Also, American Express card transactions cost merchants slightly more than any other card brand which affects their bottom line.
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