What's the best credit card for my nonprofit organization?
Elaine Pofeldt is a journalist whose articles on entrepreneurship and careers have appeared in Fortune, Working Mother, Money and many other publications. She is a former senior editor at Fortune Small Business magazine and an entrepreneur herself, as co-founder of 200kfreelancer.com. Her book, “The Million-Dollar, One-Person Business,” was released in 2018. She writes "Your Business Credit," a weekly column about small business and credit, for CreditCards.com.
What's the best card for my nonprofit with no interest and no annual fee?Zero percent APR offers change depending on the promotion, but there are several options on the market for a card that will charge no interest and no fee for 12 months or more.
Dear Your Business Credit,
I represent a nonprofit organization that has an excellent credit rating and needs a credit card that will allow large purchases with no interest and no annual fee. Is there such a thing? – Mort
It’s great to hear that your nonprofit has an excellent credit rating. That will open the door to better credit card deals.
Often, business credit cards can be a good fit for a nonprofit because many of these cards allow for large purchases. The challenge is that they do not come with all of the same protections as consumer credit cards, so anyone in your organization using these business cards needs to be aware of that.
For instance, under the Credit Cards Accountability Responsibility and Disclosure Act of 2009, commonly known as the Credit CARD Act, consumer cards’ interest rates can rise only under certain circumstances – you’ve missed two consecutive payments, or the Federal Reserve raises its key lending rate. But business cards are allowed to increase rates more quickly. That can affect the financial situation of the nonprofit if there is a lot of debt on the card.
Business cards also frequently require a personal guarantee, so if you are making large purchases on the card, whoever in the organization provides the guarantee needs to be aware of the responsibility that comes with this. When someone personally guarantees a credit card debt, that means he or she is promising to pay it back even if the organization closes or can’t pay the bill. (For more on this subject, see “Is the primary cardholder for nonprofit personally liable?”)
There are a number of business credit cards that offer 0 percent interest deals, but generally these do not last indefinitely. (You likely can transfer the balance to another 0 percent interest card at the end of the deal to avoid that challenge.) Many business credit cards have no annual fee, so if you are willing to live with a 0 percent APR deal that expires, you will have many choices in front of you.
Currently, both the Capital One Spark Miles for Business and Capital One Spark Cash Select for Business cards offer 0 percent APR for nine months with no annual fee. Meanwhile, the Chase Ink Business Cash credit card is offering a 0 percent APR for 12 months, with no annual fee. American Express has introduced a 0 percent interest deal for purchases and balance transfers for 15 months if you open the Blue Business Plus credit card from American Express. And, the Bank of America Business Advantage Cash Rewards Mastercard credit card offers a 0 percent APR for the first nine billing cycles and no annual fee.
Deciding which card works best for you may come down to the other perks and rewards. These can come in handy for a nonprofit that is trying to get the most out of every dollar. I’d suggest appointing someone on your team to keep on top of both attractive interest rate deals that eventually might replace your current one, and rewards. If you’re making large purchases on behalf of the organization, you might as well do it in a way that benefits the nonprofit most. That way, you’ll have more resources available to serve the causes most important to the group.
Tip: Business cards frequently require a personal guarantee, so if you are making large purchases on the card, whoever in the organization provides the guarantee needs to be aware of the responsibility that comes with this.
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