In this article we cover all you need to know about getting a credit card account for your church. We will discuss what you should consider before applying for a credit card, as well as offer advice on how to set up a church credit card use policy that will prevent abuses or misuses of your credit card account. We will also explain how church credit card donations can become a useful tool for both your organization and the members of your church community.
Best Credit Cards for a Church
We often get questions from people asking what kind of credit card is best for a church or non-profit organization. The simple answer is this: when it comes to credit cards, it does not make a difference whether your organization is a church, non-profit, or for-profit company.
Having said that, there are certainly things to consider when choosing the best credit card for your church or organization.
It is important to note that unless you are a medium to large business, you CANNOT get a credit card without providing your Social Security Number, even if it is called a business credit card. Therefore, the person applying for the card is fully responsible for paying back everything that is charged on the account by any of the cardholders (i.e. people with access to the credit card). Since you have to give your SSN even when applying for a business credit card, you should consider both general consumer and business credit cards and choose based on which best fits your needs.
The first thing you need to consider is whether you need a credit card that will allow you to set different limits for each person who uses the account or whether each person on the account can have the same limit as the primary account holder (i.e. the person applying for the credit card).
If all of the people with access to the account can have the same limit, then you can apply for a general consumer credit card, which you will only use for church expenses. You may want to consider this type of credit card as your first choice if you do not need to set individual limits because general consumer credit cards are protected under the new credit card law (Credit CARD Act), and business credit cards are not. With a general consumer credit card, you won’t have to worry about the credit card company changing the interest rate on your existing balance until you are a full 60 days delinquent. The person applying for the credit card will need to provide his or her Social Security Number (SSN), along with other personal information requested in typical credit card applications.
Helpful resource: Our Editor’s Choice for Best Credit Card
If you need to set different credit limits for each person with access to the account, then you should apply for a business credit card. Although business credit cards are not protected under the new credit card law, they often offer higher credit limits and allow you to efficiently track expenses. The person applying for the credit card will need to provide his or her Social Security Number (SSN), and the companies Tax ID Number (TIN) or Employer ID Number (EIN) among other personal information.
Helpful resource: Our Editor’s Choice for Best Business Credit Cards
Church Credit Card Policy
Like any other business, you will need to have a policy in place for the use of the church’s credit card accounts by staff members.
Having a policy in place will set parameters and allow the church to clearly define who qualifies for a church credit card, how the card may be used (i.e. for what expenses), and the responsibilities of the cardholders. Have your staff members with access to the account sign the terms and conditions of your policy before issuing them a credit card.
The review process for credit card expenses is very important. Your policy should include rules requiring the review of each monthly statement by the cardholders’ superior to verify that the cardholder has not misused the card. Your policy should address what is considered adequate documentation for charges to the card and the timeliness of when those receipts are submitted.
There should also be guidelines for disciplinary action should a cardholder breach the terms of your credit card policy. Having clear guidelines in place will ensure that misuse and abuse of the card stays to a minimum. These guidelines should include penalties for misuse of the card, including cancellation of the credit card for that cardholder or other disciplinary action. Some churches do things like require a person to surrender the card for three months after the first offense, and may require corrective action or termination of employment for further offenses.
How Credit Cards Can Help With Donations
More and more, people are likely to use credit cards over cash. This could affect your donations, but accepting donations through electronic means can make up for this problem. There are many companies that do church credit card processing that will help you set up a merchant account to allow you to accept donations on behalf of a company or individual. You can even set up a “Giving Kiosk” in the church itself that will allow people to make electronic donations.
Since 2007, the IRS requires documentation for charitable contributions under $250. Since credit cards leave a “paper trail” they will allow donations from individuals to be more easily tracked and verified.
Once you have identified a processor, you can also set up “Automatic Tithing”. For this process, your church members can fill out a form at church or online providing their credit card billing information, the amount they want to give to the church, and the frequency of the contributions. They can specify whether they would like to donate a large sum once a year, or smaller amounts more frequently.
