This article discusses Nonprofit Credit Card Processing. A nonprofit firm is one that does not pay tax with the IRS. These nonprofit organizations need credit cards to make purchases and carry out other expenses. An organization has to pick the best credit card for its financing needs. It is best for a firm like this to choose a credit card with low interest, high rewards and low fees.
However, financial institutions don’t specifically give nonprofit cards. Rather, your nonprofit can apply for a business credit card to use for making purchases for your organization. On the credit card application, supply the employer identification number as given by the IRS. In case your nonprofit hasn’t established a credit history, use your personal credit and income to approve the application. In that case, your credit card use will also affect your credit history personally.
Nonprofit Credit Card Processing ; Consider a Credit Card With Low Fees
As a nonprofit, your goal is to lower expenses. Go for a card with the lowest fees. Even if you intend to earn rewards on your credit card purchases, find a no annual fee card. And if you plan to use your credit card for foreign transactions, use a no foreign transaction fee card.
Nonprofit Credit Card Processing ; Choose the Best Interest Rates
Choose a card with 0% introductory APR for the first few months of account opening. This allows you to make larger purchases and pay them off over time without additional finance charges. Go for a credit card with a low interest rate for purchases.
Consider a Rewards Program That Fits Your Organization
Each card is best in a particular area. Some credit cards pay higher rewards on dining, travel, or office supplies while others pay flat-rate rewards on all your purchases. Choose a credit card that fits your organization’s spending habits.
In case your nonprofit demands employees to eat out, for example, choose a card that pays rewards on restaurant purchases. You don’t have to use the credit card for large purchases. Instead, you can maximize your rewards by using your credit card for everyday purchases. Do not overspend.
Additionally, some rewards credit cards give a sign up bonus. After spending a minimum amount on purchases within the first few months of opening your credit card, you’ll receive a large bonus rewards. If you’re considering a sign up bonus, weigh the minimum spending amount against your projected spending to be sure you’ll be able to earn the bonus.
Consider Whether You Need Employee Cards
Some credit cards allow you to add employees as co-applicants. Are you very sure you need to add the employees? Ensure you understand and communicate spending requirements to them. This may mean creating company policies that employees must acknowledge and follow if they have an organization credit card.
For nonprofits, personal spending on the organization’s credit cards can put the organization’s tax-exempt status at risk. There should be strict rules guiding employee spending.
Review the Qualifications
Most reward credit cards have good or excellent credit as their qualifications. Ensure that your credit score is well built or high. If your credit score is low, you can consider other options. A secured credit card is a perfect option for people or nonprofit firms with low credit score.