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Does Your Chapter President Know Fraternity Credit Cards Exist?


Seriously, prez. Open a new tab on your browser and Google “Fraternity Credit Cards.” We’ll be here waiting when you get back. No? Didn’t work? Hmm, maybe search: “What are Fraternity Credit Cards?” or “Where in the world is Carmen San Diego?” Both these questions are likely to yield the same result: frustration and a headache, as well as perhaps an international debacle involving a woman in a red hat. Okay, maybe not. But the idea here that is beginning to materialize is that fraternity credit cards don’t exist, and for good reason. Displacing debt simply isn’t a good idea for fraternity chapters.

That’s why we here at OmegaFi asked the question, Does Your Chapter President Know Fraternity Credit Cards Exist?—because we wanted to get your attention, so you realize how enticing it sounded, and that the idea in this case can lead you into a financial trap.

But wait, you might be asking yourself, small businesses utilize credit lines, so why shouldn’t a fraternity chapter? The answer is in the subtle differences between actual businesses and chapters, particularly the consequences of relying on credit rather than getting on top of debt, and even growing your chapter’s savings—which should all be part of your organization’s financial goals.


Most fraternity chapters rely on an inclusive system of dues from brothers to directly fund their activities, and don’t necessarily require chapter credit lines for startup costs or to help grow the brotherhood (there are other resources for that, including those of your national organization and alumni), which is ideal. It may be tempting to consider fast solutions to issues with funding and delinquent dues, but it’s much better to pursue dues collection diligently (see some of our other posts on ways to get brothers to pay) and fund activities of the chapter accordingly.

Take two scenarios. Scenario one: Your chapter has a few really tough recruiting semesters. There are far fewer new members than you’d anticipated, and on top of that, a bunch of brothers graduated at once. Also, the remaining brothers aren’t paying their dues on time, so you’re in a bind financially. Things are being stricken from the budget left and right to make sure you can cover the essentials, housing fees, etc. In this scenario, you have savings set aside from past semesters, when recruiting was good, dues were paid in full, and you met all your financial goals. The savings cushion the blow of the more difficult years for the chapter, while you regroup and get back on your feet. Even if pockets are a bit shallower, wallets lighter, belts tighter, or whatever metaphor you prefer, you and your brothers will make it through this and be better for it.

Scenario two: Same thing happens. However, instead of relying on past savings, your chapter opened a credit line and accrued interest on your debts. You all hang your heads in the harsh winter of your chapter’s legacy and wonder, Now what? This scenario could really be detrimental and tarnish the chapter for years to come, if it survives. According to Forbes Magazine, 80 percent of small businesses fail within 18 months of startup. You don’t want to go down that road.


There are many alternatives, of course, though OmegaFi would like to present you with one specific kind of tool, an alternative to getting your chapter into credit debt. That is, we’d like you to consider the benefits of Bill Pay, a service that will allow your chapter to manage finances via Vault. Bill Pay offers a variety of services that will help your chapter manage finances, including accounts payable and receivable reporting, electronic record keeping of all your chapter bills, email reminders, the assistance of an accounts manager, invoice records and auditing assistance, automatic payment scheduling, and other budgeting tools.

Yet Bill Pay offers a kind of service fraternity chapters should consider as a sort of inverse idea from a fraternity credit card (think light side versus dark side of the force in Star Wars, only about prudent financial planning versus the deep dark hole of debt). That is, rather than a credit card, your chapter can utilize an *Officer Purchasing Prepaid Card. This is a great strategy to, rather than allow debt to replace debt, set borders and strict parameters on spending limits. Your chapter can avoid having to deal with cash, track spending, and get itemized reports on deposits, deductions, and balances in the budget. There’s no future payments and accrued interest involved, no debt, and much less hassle.

Say you’re planning a formal event for your fraternity chapter. Say that after crunching the numbers and after dedicating funds to other more pressing expenses, your treasurer comes to the conclusion that you can throw a formal that will cost about $200 per brother. You’ve already factored in savings for the semester, calculated who still owes dues, and now the budget is finalized. If unforeseen expenses for the formal crop up that you can’t afford? The cost of the venue is less flexible than you’d thought, perhaps. Or the D.J. or catering cancels last-minute due to a conflict, and the alternatives are more expensive. Well, tough. You’ll have to get more creative and come up with real solutions within the budget limit of the card, rather than the knee-jerk reaction of buy now, pay later, assuming the dues will come rolling in (that’s always a dicey proposition, as many fraternity chapters are well aware).

Bill Pay and a prepaid card may or may not work for you depending on your fraternity chapter’s needs, though the goal in any event is prudent financial planning as opposed to seeking to simply shuffle around and compound debt.

Do you have other alternative ideas to credit lines that can benefit chapters and their finances? Did we get you thinking when we asked if your chapter president knows about fraternity credit cards? Let us know your financially prudent thoughts in the comments below.

*The Officer Purchasing Visa Prepaid Card is issued by Republic Bank & Trust Company, member FDIC, pursuant to a license from Visa U.S.A. Inc.


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