Navigating the world of business credit cards can be daunting, especially for nonprofits, which have unique needs and financial constraints.
But the best nonprofit credit cards can help streamline expenses, trim costs with rewards programs, and support your organization’s mission.
This article explores 8 factors to consider in choosing the best business credit card for your nonprofit.
What is a nonprofit credit card?
Nonprofit credit cards are specifically designed for organizations that operate on a tax-exempt basis. They work like other business credit cards, but they offer features and benefits that cater to nonprofits, helping them manage their finances efficiently while maximizing the potential for rewards.
Can nonprofits use credit cards?
Yes, nonprofits can use credit cards to manage their expenses, make purchases, and even earn rewards. These cards can streamline the purchasing process, so organizations can spend more time on their mission and less time navigating financial hurdles.
Are nonprofits exempt from credit card fees?
While nonprofits are tax-exempt, they're not automatically exempt from credit card fees. Each credit card issuer has different policies about fees, including annual fees, transaction fees, and interest rates.
Just like for-profit businesses, nonprofit organizations should review these fees carefully before committing to a nonprofit credit card.
What to consider when choosing a card for your organization
The best business credit cards offer many benefits that can support the operational needs of your nonprofit.
Here are some critical features to consider when evaluating the best nonprofit credit cards for your organization.
Rewards programs
Most business credit cards offer some kind of rewards program. This can be incredibly beneficial for nonprofit organizations looking to maximize their fundraising efforts.
With the right credit card reward system, nonprofits can earn points on their everyday business purchases like office supplies. Then, they can redeem rewards to offset expenses or fund special projects.
Cashback rewards in particular can help stretch limited budgets further and provide additional cash to support the organization's mission.
Make sure you investigate any additional bonus cash rewards too. Many cards offer benefits such as referral bonuses or welcome bonus points for balance transfers.
Finally, make sure you understand how any cashback rewards work, such as ACH deposits into your business checking account or statement credits.
Interest rates
Another important factor to consider when exploring credit card options is the interest rate offered by each provider. Lower interest rates can help your organization save money on any carried balances, allowing more funds to be allocated toward the nonprofit's mission and goals.
Beware of offers on nonprofit credit cards that only provide zero or low interest charges for an introductory period, such as the first six months, and be sure you understand the potential interest range on cards with a variable APR.
If your organization plans to pay off the card each month, the interest rate might not be an important factor in your situation. In fact, you might want to apply for a different kind of corporate card rather than a credit card.
Credit limits
Credit cards for nonprofits can provide organizations with flexible spending options and financial assistance when needed.
One important aspect to consider when choosing a credit card for your nonprofit is the credit limit. A higher credit limit can give your organization greater purchasing power and flexibility in managing expenses.
It can also help cover unexpected costs or emergencies that may arise in the course of your nonprofit's operations. With a well-managed credit card and an appropriate credit limit, your nonprofit can ensure smooth financial operations and continue to focus on its mission and goals.
Annual fees
When considering credit cards for nonprofits, evaluate each annual fee to make sure that the costs align with your organization's budget and goals.
Annual fees (and any other fees associated with credit cards) can diminish the overall value of the card for your nonprofit organization.
Payment cycles
When you're considering cards for your nonprofit, be sure you understand how much time will pass between making a purchase with the card and when the card payment is due.
Sometimes, delaying a purchase for just a day or two can push the payment into the next billing cycle, effectively giving you an extra month.
This allows nonprofits to make necessary purchases for their operations without having to pay for them right away, giving them more flexibility with their finances. That’s especially helpful for nonprofits that have irregular funding or donation cycles.
Foreign transaction fees
Many nonprofits operate on a global scale, working with partners or donors from different countries. By using credit cards specifically designed for nonprofits that offer a low foreign transaction fee, organizations can save money and allocate more resources toward their mission-driven work.
If your organization works in other countries or pays foreign partners, it's important to investigate each card's foreign transaction fees to optimize your financial management.
Streamlined operations
Did you know that some corporate cards come with expense management software at no additional cost? With charges that populate into the software in real time, these cards offer unmatched visibility into your spending.
They also make your financial operations easier to manage by collecting information from employees at the time of purchase, including spending categories and receipts. This can save your team countless hours tracking down information at the end of each month and comparing transaction data to paper receipts.
With the ease of management that today's business cards offer, organizations can focus more on their mission and less on the administrative tasks related to financial transactions.
Budget control
The expense software that comes with today's corporate cards can give you tremendous control over employee spend. The right software makes it easy to set (or change) limits on employee cards—by employee, by department budget, and more.
You can even build your policies and spend controls into the system, so you don't have to worry about unauthorized charges.
Security features and fraud protection
Finally, before you choose a card, be sure you understand the security features that each one offers.
- Does the card let you set roles and permissions by user?
- Does it let you defund cards instantly, 24/7?
- Can you create virtual cards on demand, with monthly fund limits or one-time-use budgets?
Today's cards can provide an added layer of financial protection if you choose carefully.
How to choose the best credit cards for nonprofits
Choosing the right credit card for your nonprofit involves several steps.
1. Assess your needs
Determine your organization's spending habits and financial requirements to narrow down suitable card options. Do you spend more money at gas stations or on office supplies? Maximize your cashback rewards by choosing a card that will offer rewards and bonus points on these or other purchases with the most spending.
2. Research options
Compare multiple credit cards, focusing on interest rates, fees, rewards, and additional features.
3. Read reviews
Explore reviews and testimonials from other nonprofits to gauge user experiences with potential credit cards.
4. Consult with financial advisors
If possible, consult with a financial advisor or accountant who specializes in nonprofit management to help you make informed decisions.
5. Apply wisely
Once you've narrowed down your options, carefully review the terms and conditions before applying. Ensure that the card aligns with your organization's financial strategies.
BILL Divvy Corporate Card as an alternative solution for your nonprofit
If you're looking for a card that offers a great rewards program plus cutting-edge tools like budget control, virtual cards, and more, the BILL Divvy Corporate Card—issued by Cross River Bank, Member FDIC—is a compelling alternative.
A corporate charge card, rather than a credit card, offers fast, flexible business credit plus free-to-use BILL Spend & Expense software that gives you exceptional control over your budgets, spend limits, reimbursements, and more.
By integrating budgeting and expense management into one platform, BILL helps your nonprofit streamline financial operations and maximize your mission impact.
Why nonprofits love BILL
Don't take our word for it. Here's what our nonprofit customers have to say.
Simplify your annual nonprofit audit
“One of the beauties of BILL is that I can give the auditor read-only rights to go into our account and look at our records. I don’t have to search through box after box for all those individual pieces of paper. Everything’s right there. It’s taken all the pain out of that process.” — Manhattan Soccer Club
Streamline and capture approvals
“I know that even if I process something outside of BILL, it will still capture my approval, the Executive Director's approval, and the board’s approval. There’s always a paper trail.” — Massachusetts Horticultural Society
See historical spending to plan new budgets
“As an account owner, I love the ability to login to BILL to view vendor histories. That is really important for me. For example, I’m responsible for everything that’s printed. So when budget time comes, it’s great that I can easily look up past printing and paper costs and factor all that into my calculations.” — Family Giving Tree
Pitch donors with confidence
“[BILL Spend & Expense] makes me feel more confident when I'm pitching donors to give to Encircle because I know exactly how much is being spent, and where, and how it's categorized, so if a donor asks me a question about where their money went, I know the answer.” — Encircle
