A nonprofit organization is granted tax-exempt status by the IRS due to its focus on providing public service or supporting social causes. Such entities do not aim to generate profits for owners and typically allocate all earnings, after covering operational costs, to their designated causes.
Despite their nonprofit status, these organizations can still benefit from having a dedicated credit card. Similar to for-profit businesses, nonprofit owners find it advantageous to use a small-business credit card to separate business transactions and streamline expense management during tax preparation.
Moreover, nonprofit organizations can leverage business rewards credit cards to earn cash back and access essential consumer protection benefits.
Comparing the best credit cards for nonprofits
The ideal credit cards for nonprofits are those offering robust perks, transparent fee structures, and generous rewards rates. Explore which cards align best with the needs of nonprofit organizations.
| Card name | Annual fee | Rewards | Bankrate score |
|---|---|---|---|
| Ink Business Cash® Credit Card | $0 | 5% cash back on up to $25,000 spent annually on combined purchases at office supply stores, internet, cable, and phone services. 5% cash back on Lyft rides through March 2025. 2% cash back on up to $25,000 spent annually on combined purchases at gas stations and restaurants. 1% cash back on all other purchases. | 4.3 |
| Ink Business Unlimited® Credit Card | $0 | Unlimited 1.5 percent cash back on all purchases 5 percent cash back on Lyft rides through March 2025 | 4.2 |
| The Blue Business® Plus Credit Card from American Express | No annual fee | 2X points on up to $50,000 in purchases per year, then 1X points thereafter 2X points on eligible travel purchases made on amextravel.com 1X points on all other purchases | 4.1 |
| The American Express Blue Business Cash™ Card | No annual fee | 2 percent cash back on all eligible purchases (up to $50,000 per year, then 1 percent) | 4.3 |
Top cards for nonprofits
Ink Business Cash® Credit Card
The Ink Business Cash® Credit Card is well-suited for nonprofit organizations managing significant office expenses. It offers a robust rewards program with enhanced cash back in essential business categories. There is no annual fee, and the introductory APR on purchases can provide savings, making it an excellent choice for nonprofit owners needing temporary interest-free credit for initial expenses.
Key benefits for cardholders include fraud protection, complimentary employee cards, purchase protection, extended warranties, and auto rental collision damage waiver for business-related car rentals.
Pros:
- The introductory APR on purchases supports new nonprofit ventures by delaying interest.
- Ideal for small nonprofit owners seeking a cost-effective business rewards card due to its lack of annual fees.
Cons:
- Enhanced rewards are limited to $50,000 spent annually, which larger nonprofits may exceed.
- Rewards categories may not cater well to nonprofits operating remotely.
Ink Business Unlimited® Credit Card
The Ink Business Unlimited® Credit Card is a solid choice for nonprofits seeking straightforward rewards on their business expenses. It comes with no annual fee and offers a consistent rewards rate on all purchases, which is ideal for those who prefer simplicity.
Cardholders also benefit from complimentary employee cards, purchase protection, extended warranties, auto rental collision damage waiver for business-related car rentals, roadside assistance, and other perks.
Pros:
- The card features a favorable introductory APR on purchases and maintains a relatively low ongoing APR.
- It’s particularly advantageous for nonprofits operating on smaller budgets due to its lack of an annual fee.
Cons:
- Cards with bonus categories may yield higher rewards or cash back rates.
- It’s not suitable for consolidating debt since it lacks an introductory APR on balance transfers.
The Blue Business® Plus Credit Card from American Express
The Blue Business® Plus Credit Card from American Express offers a no-annual-fee option to earn points in the American Express Membership Rewards program. This allows cardholders to accumulate rewards that can be redeemed for gift cards, merchandise, travel through AmexTravel.com, and transfers to American Express airline and hotel partners.
For nonprofit owners seeking flexible and valuable rewards, this card is an excellent choice. It features a straightforward rewards program with a flat-rate earning structure. Additionally, its Expanded Buying Power feature enables users to exceed their credit limit temporarily if necessary.
Pros:
- The Expanded Buying Power feature can be useful for temporary increases in spending beyond your credit limit.
- There’s no annual fee, ensuring your reward earnings aren’t offset by hefty charges.
Cons:
- It lacks an introductory APR on balance transfers, which isn’t ideal for managing high-interest debt from other cards.
- The $50,000 annual spending cap on boosted flat-rate rewards for general purchases may restrict high-budget spenders.
The American Express Blue Business Cash™ Card
The American Express Blue Business Cash™ Card operates similarly to its “Plus” counterpart but provides cash back instead of American Express Membership Rewards points.
For those seeking rewards on everyday purchases, it’s an outstanding choice. However, if you prioritize flexibility in redemption options, consider a card offering multiple ways to redeem rewards. In this context, the Blue Business Plus might be preferable, particularly because American Express Membership Rewards points are valued at approximately 2.0 cents per point when used with travel partners, according to recent Bankrate valuations.
Pros:
- It offers one of the highest flat rewards rates among business cards with no annual fee.
- The Expanded Buying Power feature allows cardholders to exceed their credit limit.
Cons:
- The spending cap for earning 2 percent cash back may limit potential rewards accumulation.
- This card provides fewer cardholder perks compared to other business reward cards.
How to choose the right credit card for your nonprofit
Nonprofits typically do not require the personal perks or benefits associated with business credit cards that have annual fees, so it’s advisable to avoid such cards unless they offer substantial benefits that align with your organization’s needs.
While many of the top cards for nonprofits do not impose annual fees, this doesn’t exclude them from offering excellent rewards. When selecting the most suitable card for your nonprofit, prioritize factors such as cost-effectiveness, perks, rewards structure, and flexibility in redemption options.
Factors to consider when picking a nonprofit credit card
Annual fees: When choosing a nonprofit credit card, prioritize options that do not charge an annual fee to minimize expenses.
Perks and benefits: Look for business credit cards that provide valuable consumer protections beneficial to nonprofit operations. These could include purchase protection against theft or damage, and extended warranties on eligible purchases.
Rewards: Assess the spending categories where your nonprofit most frequently makes purchases. Compare credit cards to find those offering higher rewards rates in these categories.
Redeeming rewards: Opt for a card that allows flexible redemption options aligned with your nonprofit’s needs. Ideally, you should be able to redeem rewards for charitable donations or as cash back that can be reinvested into your organization.
In Conclusion
Nonprofit organizations may not focus on generating profits, but having a dedicated business credit card offers several advantages. It helps separate business and personal expenses, simplifies financial tracking, provides valuable rewards on business-related spending, and offers a line of credit to manage ongoing costs.
By carefully comparing and selecting the right credit card for your nonprofit, you can streamline expenses and maximize rewards, enabling your organization to concentrate on its essential social mission.