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Church treasurer seeks credit for purchases

Opening Credits columnist Eric Sandberg

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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Question for the CreditCards.com expertDear 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 

Answer for the CreditCards.com expertDear 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

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