Church treasurer seeks credit for purchases
Erica Sandberg is a prominent personal finance authority and author of "Expecting Money: The Essential Financial Plan for New and Growing Families." She writes "Opening Credits," a weekly reader Q&A column about issues for people who are new to credit, for CreditCards.com.
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Dear Opening Credits,
I am the treasurer at
the church I attend. The church (a nonprofit) would like to obtain a credit
card(s) for purchases for either the church or the parochial school they
operate. I don't have any idea how much it would be used. And I would also
guess the balance would be paid off every month. What kind of card would you
recommend for this circumstance? -- Ron
A church may run on nonprofit
status, but it still needs to function effectively and efficiently. For this
reason, a card that is specifically for business use is the way to go!
There are so many
terrific credit and charge accounts that banks offer to companies -- whether
small or large, for-profit or nonprofit -- that I can't tell you exactly which
one is best for your needs. Take the time to review them all and then decide.
The best way is to visit the Cards for Business section here on
CreditCards.com and read over the terms and qualification standards for each.
If you'll need to use the
card to purchase particularly pricey items and services, you may want to have
the luxury of a charge card. With this type of credit product you can enjoy an
exceptionally high spending limit and no interest will be applied to the amount
you charge. Mind, though, that you'll have to repay the balance in full in
about 30 days. Being positive that you'll have enough in the coffers to cover
the bill will be imperative.
Therefore, if you prefer
to have a bit more flexibility, a credit card will serve you better because it
will allow you to break up the charges into installments. Financing fees will
be added to the sum that you roll over, but if you pay the debt down quickly,
the convenience can be worth the additional cost. If a credit card makes more
sense, go for the one with the lowest interest rate. This way when you do hold
on to a balance for a while, the extra fees will be as minimal as possible.
The majority of business
cards offer cash-back rewards, so seek out the account that comes with the most
robust program. It can be a great way of making a little extra money while you
shop for all that you require to keep the church plugging along. All you have
to do is use the card for key expenses and you'll earn a percentage of what you
spend. Assuming you charge regularly and always pay the debt to zero by the due
date, the church will come out ahead financially.
Also, look for special
arrangements that many credit issuers have with other businesses that might be
beneficial. For example, some partner with office supply and postage companies,
airlines, restaurants and gas stations. Choose the card that has a partnership
with those companies that you do business with anyway, and the advantages of
having that card increase yet again.
Whichever credit account
you get, make sure that it is managed correctly. Never (EVER) commingle charges
with personal use! That may sound obvious, but it happens a lot and it can
seriously entangle accounting. Make certain that only designated employees have
access to the card and double-check receipts against the statements. Address
any problems you may find immediately.
Remember too, that both
for businesses and individuals, simply possessing the ability to spend more
than you earn is tempting. It's amazing how balances can creep up, even for the
well-intentioned. Be careful and prudent.
See related: Churches embrace online credit, debit card donations, Tips for managing your first business card, 10 ways business cards are different
Erica Sandberg is a nationally renowned personal finance authority. She’s host of several financial web shows, and a frequent guest for media outlets such as Fox, Forbes, Nightly Business Report and NPR. Erica previously was affiliated with Consumer Credit Counseling Service and was KRON-TV’s on-air credit expert. Her book, "Expecting Money: The Essential Financial Plan for New and Growing Families," was published in 2008 by Kaplan Press.
Send your question to Erica.
Published: August 29, 2012