Monday, February 2, 2009

Why can't a nonprofit get its own credit card?

I recently had a conversation with a NonprofitSOS reader that has been asked to be the holder of the credit card for the nonprofit where they work. What does this mean? Well, it means that a new credit card is issued for the nonprofit with both the employee's and the nonprofits name on it. It also means that their social security number is used for the card, and their credit could be affected. This also happens a lot in the business world- employees have company cards- but with businesses the likelihood of losing funding is much smaller. I recently discovered that credit card companies won't let you get a card just for the business- you have to use your social security number (I discovered this when getting a company card for The Advancement Company).

My question is, why can't a nonprofit (or a business for that matter) get a credit card with just the nonprofit or business name on it? Why does an employee have to put their credit on the line? Both nonprofits and businesses have EIN numbers (social security numbers for organizations), so those could be used to get the card. I think the main reason this happens is because the credit card company wants an actual person to put the ultimate blame on if something happens. But, I think that this should be changed- a company or nonprofit should be able to have its own credit score, which in turn would affect their rates and the amount of credit available to them.


crossn81 said...

I'm pretty sure that a previous non-profit employer had a credit card with the corporations name on it and select signers. This was a few years ago.

I think we had two different cards - one was only corporate and kept in the office and the other was used by our camp directors and was tied to their name and the corporation.

Nonprofit SOS said...

The nonprofit/business credit cards that I have seen or had all had the organization's name on it and my name- I had to fill out a form w/my ssn to get the card. Maybe larger nonprofits are allowed to have a card without a person's ssn? I'm not sure. I know that for businesses (at least with Capital One) they require a person's ssn before giving you a business card.

leo in the east said...

Not true for the larger non-profits. I am an E.D. for a larger non-profit, and ran into the same issue. All credit card companies now seem to require a personal guarantee of credit. I recommend a debit card tied to a smaller $ management account, and separate from a general account. No personal guarantee of credit is needed in these cases.