The quick answer to choosing a credit card for your nonprofit and your organization is that there is no one size fits all.
What works best for you and your organization may not work best for someone else – but with some simple research into the features and benefits of each credit card program, you’ll be able to find one that suits your needs.
Determine your nonprofit’s needs
The first step in choosing a credit card for your nonprofit is to establish your nonprofit’s needs. What do you use a credit card for the most? Some cards offer cash incentives, others give points for travel, and some are even co-branded as a donation incentive. No matter your nonprofit’s goals, there is almost definitely a credit card that can help you reach them.
For example, if you need a card that won’t charge you an annual fee, you’ll want to ensure that any business credit card you choose does not come with an annual fee. You may also want to know if the cards offer points, miles, or cash back for your purchases and what percentage of those go to your organization (if any).
Once you have determined your nonprofit’s needs and the features that would benefit it, you will then be able to compare various cards and see which offers you are looking for. It may take a little time to create a list of possible candidates before applying for one or more business credit cards, but ultimately your investment should pay off if you make the right choice.
Your organization’s spending behaviors
Every credit card has a minimum spending requirement before you can qualify for the bonus cash, points, or miles. Some cards require as little as $500 in spending to get that initial incentive, while others may have a higher minimum of $5,000 or even $10,000.
It would be best to consider how much your organization is planning on spending in the upcoming year, as businesses that spend less than $3 million annually typically won’t qualify for certain cards’ signup bonuses.
Research nonprofit credit card benefits
When looking for the best business credit cards for nonprofits, you should be looking at more than just the interest rates and fees. While those factors are important, understanding what incentives come with your prospective card can help you make the right choice.
Some cards will give extra points per dollar spent on specific spending categories, such as entertainment or travel. Others may offer cashback on purchases like mobile phone service or office supplies, while others may have an annual fee but offer a signup bonus.
It can be pretty time-consuming to research each card’s features and benefits, but performing this due diligence will be well worth it once you have chosen which program to invest in.
While it’s essential to find a business credit card with certain features such as no annual fee, you will probably want to consider others as well. For example, would you prefer a cash bonus or airline miles? Cashback on office, cell phone, and internet purchases might also be a deciding factor.
Are there any fees for using the card?
If your nonprofit does not have a merchant account, you will want to look into whether or not the business credit card of your choice requires one. A merchant account may be required to obtain a credit card. It may also be wise to ask about the fees for cash advances.
Some cards will have a variable APR, which changes after an introductory period. For example, you may get a low-interest rate for the first six months, but that rate could go up after that time has elapsed. Consult your card’s terms and conditions before signing up for any business credit card.
What is the annual percentage rate?
As a nonprofit, you won’t use the same card for all of your purchases. That means that knowing what interest rates and fees are associated with your business credit card will help you decide if it’s worth applying for one. Of course, you should also weigh the benefits against the APR.
Do you want to give back to your employees?
Some of the best nonprofit credit cards may give a certain percentage of each purchase or cashback to employees as an incentive. You’ll need to decide if that’s important for your nonprofit.
Some people say having a rewards program is not beneficial because the money spent on rewards could be better used elsewhere.
However, research suggests that 70% of employees claim to pursue a job with a different employer who offers better benefits. In other words, 2 out of 3 employees respond that they would switch jobs for better rewards.
Some business credit cards have an employee rewards program that allows employees to get cash back on certain purchases or receive points that can be redeemed for merchandise. Knowing if you want such a benefit is another consideration before applying.
Does your nonprofit want to give back to the community?
Some business credit cards are affiliated with a charity and may offer cash back or points on certain purchases, which can go toward that cause. If you would like to support a charitable organization, finding a card with such an affiliation is worth looking into.
What is the interest rate?
You may want to check out the interest rates on the best business credit card for nonprofits before you apply to ensure they are within your budget.
Generally, cards with higher rates also have fewer rewards and benefits than those with lower rates. However, if you need a card that charges lower interest rates, be sure that the benefits and rewards outweigh using a card with a higher rate.
Is there an annual fee for the card?
One thing you’ll want to consider before applying for a business credit card is whether or not it has an annual fee. If your nonprofit does not have a merchant account, you will want to look into whether or not the business credit card of your choice requires one.
Some of the cards can be used without one if you have a merchant account, while others cannot.
The benefits of a business credit card are usually worth the annual fee if you use it regularly. However, some cards may give you cash or points just for signing up, which can be another deciding factor for your nonprofit.
What is the grace period?
The grace period is how long you have after purchasing with your business credit card before adding up interest charges. Some cards offer a 20 day grace period, while others have only ten days. This is another important consideration because interest charges can add up very quickly and put your organization in debt.
Are there any foreign transaction fees?
Using a credit card outside of the United States can cost both you and your nonprofit a lot. The foreign transaction fee is an extra charge tacked on to purchases made outside the country. These fees vary for individual credit cards.
Some business credit cards charge a foreign transaction fee, while others do not. You’ll want to check the specific card’s terms and conditions before applying.
Look for foreign transaction fees and any other additional costs or limitations that could affect your nonprofit when looking into different business credit cards.
Some cards offer more favorable rates for international purchases and transactions, so it will be essential to compare your options before choosing a business credit card.
Understand credit card fees and minimums
The business credit card you choose should also offer benefits, such as cash back or points. The terms and conditions will tell you any limits to what can be redeemed at a particular time. You’ll also want to know whether or not the amount spent on your card must meet a minimum before being able to redeem it.
While annual membership fees can be avoided by choosing the right business credit card, that isn’t always the case with other charges. Many cards have foreign transaction fees as well as late payment fees. It may be wise to consider a card with no foreign transaction fees, even if you don’t think your company will travel abroad.
Compare business credit card offers
Once you’ve determined what features would benefit your nonprofit the most, it’s time to shop around for a business credit card. You can find ones from large banks as well as smaller ones that are just starting. While the perfect card may not be available yet, you should be able to find one that can suit your needs until a better offer comes along.
When looking for a business credit card, don’t rely on just one source. Compare offers from several different banks and choose the one that is the most beneficial to your company. It’s also important to note that while some cards only allow you to view information online, others require an application to be filled out by hand.
Although a credit card offer may sound like a great deal, you’ll want to make sure it will benefit your organization and not end up costing more than it’s worth.
The ability of the card to redeem rewards
The ideal business credit card should be tailored to your nonprofit’s specific needs. While it is more important to find a card that offers the best rates for your company, you’ll also want to consider how rewards and benefits can benefit you.
After all, if there are no rewards or benefits associated with a particular credit card offer, it may be better to look for a different card that offers the features your company needs.
It is essential to keep in mind that some business credit cards may not accept applications from everyone. In some cases, it’s up to the bank or credit card issuer whether an application will be accepted or denied. However, if you are unsure whether your organization’s business credit card application will be accepted, you can always call the issuer and ask before applying.
The best business credit card for your nonprofit will depend on a variety of factors.
Your spending, fees, desired rewards, employee liability, and online card management should all be considered before signing up with any one company.
Once you’ve determined what matters most to you, read the user manuals or instructions carefully so that you know how to use your new card wisely!
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