It’s not hard to see why a small-business owner may prefer a charge card to a credit card. With a charge card, you don’t have a hard and fast credit limit, but, instead, a fluid spending ceiling based on your purchasing and payment habits. That can give you more buying power if you need to finance a big purchase.
However, it’s also not hard to see why a new small-business owner may not get a charge card – they nearly always have annual fees. Because the issuer isn’t making any money on interest (payments are due in full every month with charge cards), an annual fee allows issuers to extend the generous benefits that often come with charge cards.
The new SimplyCash Plus card from American Express (a CreditCardForum advertising partner) offers a unique option – a card with charge-card-like powers that has no annual fee. It’s a compelling offer – but read our review to make sure it’s a good fit for your business.
How the flexible limit works
Unlike traditional charge cards, the SimplyCash Plus does have a stated credit limit – and that’s how much you’ll be able to carry from month to month (with interest). But the card also has an undisclosed spending allowance above your stated limit. It’s not unlimited, but “adjusts with your use of the card, your payment history, credit record, financial resources known to us, and other factors,” according to the card’s terms. Any amount you go over your stated limit must be paid in full every month (just like with a charge card).
So how do you know how far you can go into this uncharted territory above your official limit? As with AmEx’s charge cards, you can use the Check Spend Ability feature online (or call the number on the back of your card) to check your buying power for a particular purchase (pricey equipment, for example).
According to an American Express press release, this feature reflects the wants of business owners – the issuer surveyed 1,001 small-business owners in Dec. 2015, and 76 percent of respondents who use plastic for business expenses said a spending-limit increase at least once a year would benefit their business.
The card has a rewards program with bonus categories that match common business expenses:
- 5 percent cash back (for up to a combined $50,000 in purchases per calendar year, then 1 percent back) on U.S. office supply stores and wireless phone services purchased directly from U. S. service providers.
- 3 percent cash back (for up to $50,000 in purchases per calendar year, then 1 percent back) on a category of your choice. Categories include: U.S. gas stations, U.S. restaurants, U.S. advertising purchases in select media, U.S. purchases for shipping, Airfare directly from airlines, Hotel rooms directly from hotels, Car rentals directly from rental companies, U.S. computer hardware, software and cloud computing purchases (directly from select providers)
- 1 percent cash back on other purchases (with no limit).
Because this card is part of American Express’s OPEN suite (a program that includes its other business card products), you can earn 5 percent back with OPEN Savings partners, including:
- Barnes & Noble
However you earn your cash back, it will be automatically credited to your statement. An American Express spokesperson also confirmed that you will earn rewards on charges that go beyond your official limit.
This card includes the same benefits you can expect to find on a no-annual-fee American Express card, including purchase protection (for accidental theft/damage up to 90 days from purchase), extended warranty, secondary rental car insurance, baggage insurance and access to the roadside assistance hotline.
Wait … isn’t there already a SimplyCash business card on the market?
Yes there is. The American Express SimplyCash Business Credit Card has been around for about a decade.
In addition to the “Plus” in the name, the SimplyCash Plus card offers the following things that the regular version does not:
- A flexible spending allowance above the official limit
- Higher spending caps on the 3 percent and 5 percent rewards — $50,000 in purchases per calendar year, as opposed to $25,000 with the regular SimplyCash card
- More options for the 3 percent bonus category. The regular SimplyCash doesn’t offer bonus rewards on U.S. computer hardware, software and cloud computing purchases.
Is the SimplyCash Plus a good choice?
If you qualify, the SimplyCash Plus is a step above the regular SimplyCash. Even if you don’t plan on going above your credit limit, it’s a nice option to have. Plus, the rewards have been upgraded a bit for the Plus card.
As for how it compares to cards from other issuers, there really isn’t anything on the market quite like it. With other cards, if you want the ability to exceed your limit, you’ll have to pay a fee for a charge card. If you want no annual fee and rewards, you’ll have to sacrifice the ability to exceed your limit.
The rewards on the SimplyCash Plus card are generous, too, for a no-annual-fee card. The Chase Ink Cash comes close (and has no annual fee), but it doesn’t offer 3 percent back on anything (and doesn’t let you choose a bonus category). However, the bonus categories are otherwise similar, and it might be worth considering if you worry about American Express acceptance issues abroad.