Church Should Limit Users of its Credit Card

Dear Your Business Credit,

We are a small church with operating expenses of approximately $20,000 per month. Currently we have five people in the ministry who have cards assigned to them, and the bank required their individual names to be on the card. We have trouble getting the receipts at times and are considering having just one or two cards with the church name only and giving it out to officers in the church, as needed once they make a requisition, and then signing the card out. Will a bank allow us to do that without an individual's name on the card with the church? Thank you.

-- Pastor Tommy

Dear Pastor Tommy,

This is a great question. I ran it past Leslie Tayne, an attorney in Melville, N.Y., who specializes in debt-related matters.

Based on what she says, you would have to talk to the bank to see if it would be willing to allow you to sign out one or two cards as you describe. It's important that you stick to the cardholder agreement or you may lose some of its protections if a card is lost or stolen.

However, even if the bank allows you to sign out the card without listing people's names, it is important to make sure you are not putting the church's finances at risk. One would assume that the officers of the church have its best interests at heart and would not make a wrongful purchase. Nonetheless, signing the card out to several people who may or may not bring back receipts puts you in danger of not being able to keep good financial records and losing track of how much is being spent on the card. If you're already not getting all of the receipts you need when people's names are on the cards, it's likely to become even more of a challenge if the card users don't have their names on the cards and feel even less personally responsible to gather them.

"No one should be allowed to use a credit card who doesn't give receipts," Tayne says. "My suggestion is that they should just assign one person to make the purchases."

Having a couple of cards floating around without any one person assigned to them may make it easy to lose track of where the cards are -- even if you have people sign them out. That can slow you down in noticing if a card has been lost or stolen. And what happens if the officers in the church have the cards signed out when you need to make an emergency purchase -- such as rock salt for the parking lot on a snowy day or an emergency repair to a broken window? Given the pace of life today, the officers may not have time to return the cards to the church immediately upon making a purchase.

To make it easier to handle purchases, consider setting up ongoing accounts with an office supply store and other businesses that provide things you use at the church regularly, or arranging auto-ship deliveries. That way no one will have to use a credit card.

If the officers prefer to use credit cards, another option is to have them use their own personal cards and submit receipts for reimbursement. You may find that they'll be more diligent about turning in receipts if they know they need them to get paid back. That will make keeping track of spending a lot easier.