Article Archives >> To the Point

Our 501(c)(3) organization owns an historic property.  We purchase many items online with a credit card and would like to obtain a card that does not require a personal guarantee. How do we go about getting one?  We have an excellent credit rating.

Just because an organization is nonprofit does not mean that someone should have to personally guarantee a credit card.  It is really disconcerting that someone in an industry that used to send unsolicited credit cards to people’s dogs and minor children would demand a personal guarantee for an organization with a good credit rating.  If your current card issuer won’t eliminate the guarantee requirement upon request, look around for other issuers. The bank where you maintain (or are willing to maintain) your corporate account would be a good place to start. There is a lot of competition out there and I wouldn’t stop looking until I found a deal that was satisfactory.

Comments from our Readers

The only credit card Costco accepts is American Express.  American Express treats non-profits the same as small businesses owned by individuals and insists the Executive Director or CEO give all their personal credit information. We have good credit but our CEO doesn't want to tie her personal credit to our organization's credit.  This then requires a check for all organizational purchases, which is inconvenient because it has to be dealt with manually and then manually entered in our accounting system. You are also giving an employee a blank signed check to use for the purchases.  Not what we'd prefer to do. This credit card issue is not uncommon. --A.C-L. via e-mail

Thanks for the comment.  It shows how difficult arbitrary rules can make it for small organizations.  Businesses can impose those restrictions if they want, but they might just go without my business.  No one is required to buy at Costco or to use an American Express card.  --Don Kramer

The easiest and best solution is get debit cards on your bank account.  The net result is the same and no personal guarantees are required. --G.C. via e-mail

When employees are using debit cards either off or online, I like to have a separate smaller bank account for that purpose.  In that situation, monitoring the account activity online is another way of creating checks and balances. --P.G. via e-mail

4/27/2010