A Fruity Idea From American Express

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Is American Express (NYSE: AXP) just plumb nutty? Do we need yet another color for a card?

We've run through all the base metals -- gold, silver, platinum, titanium -- and we've got the sleek black card, so now, it seems, we'll start turning to the fruits of the world in search of inspiration to promote credit cards.

I'm referring to the new Plum Card from American Express. Actually, it was unveiled back in September at an Inc. 500 event, but I got my first taste of the marketing for the card (which is targeted to small-business owners) earlier this month, when I saw a full-page, plum-colored ad in The Wall Street Journal. There is an initial run of 10,000 cards, and the September conference attendees were all eligible to receive an application (they also got an Apple iPhone as part of their goodie bags). AmEx will be announcing some of the first companies to get the card on Dec. 16 during MSNBC's Your Business.

Despite the card's silly name, it's actually a pretty good idea: Small-business owners can either pay off the card's balance in full within 10 days and receive a 2% credit applied back to their bill, or they can extend the payments out if necessary. By paying as little as 10% initially, and the balance within two months, cardholders can make purchases interest-free.

Until now, small businesses had a difficult time negotiating terms of credit with their suppliers without the heft of a major corporation backing them. Suppliers often demanded payment up front from small-business owners, and oftentimes, they had to use cash to get the best deal. The Plum Card mimics trade terms that are often offered to businesses, but are frequently inaccessible to smaller ones.

There's no credit limit on the Plum Card, and businesses can save money by paying off their balance at the end of each billing cycle. It also allows businesses to use just one card for all their business purchases, which is what I'm sure American Express was trying to do. And the card offers automatic savings for purchases made at select partners, like FedEx (NYSE: FDX) Kinko's and Hyatt hotels.

There are plenty of cards available for business. MasterCard (NYSE: MA) offers a number of different models (no fruits yet, though), and Discover (NYSE: DFS) unveiled its first business card earlier this year. Discover also provides unlimited fee-free checks to use when vendors don't accept credit cards. Advanta (Nasdaq: ADVNB) has one of the top-rated business cards, according to the consumer advocates at CardRatings.com. Little wonder there's so much interest: Business cards carry an average 13.2% APR, according to CardRatings, similar to the 13.37% APR average on consumer cards.

Not every business is eligible for the Plum Card, in keeping with the exclusivity American Express has been known for. Generally, you need revenue in the six- or seven-figure range, and the 2% discount applies to monthly spending of $5,000 or more (otherwise, it's 1%). But beyond that (and the hefty $185 annual fee), it's a plum deal for small and mid-size businesses managing their cash flow.

American Express has managed to create some buzz about what would have been a more mundane press release if announced by another company. Stay tuned for the introduction of competing apple, banana, and kumquat cards to attract customers. Before long, we ought to have a veritable cornucopia of fruits available to make business purchases.

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