Capital One® Spark® Classic for Business Review

As the name suggests, the Capital One® Spark® Classic for Business best serves small business owners who need to jump-start their credit while starting or growing their company. The card belongs to the cash-back rewards realm where Capital One® credits you a percentage rebate tied to the dollar amount of the purchase.
Capital One has a broad offering of cards for personal and business use and in this case, the Spark® Classic is a very basic option for credit rebuilders running their own shop. For owners ascending to higher levels of creditworthiness, this card will serve that purpose. However, once you get where you’re going in terms of credit score, you’ll find some business cards with better benefits and lower rates.

The Essentials of the Capital One® Spark® Classic for Business

  • APR: 24.49% variable
  • Annual fee: None
  • Primary feature: All purchases receive a 1% cash-back reward with no minimums on redemptions.
  • Introductory bonus offer: None

What’s Interesting about the Capital One® Spark® Classic for Business

If you’re looking for a no-nonsense way to finance some small equipment purchases or just maintain some cash flow as you start up a business, the Capital One® Spark® Classic for Business might be right up your alley. One advantage of owning the card is that you can put your rewards program on autopilot. By setting redemptions to come by check or gift card, you can reap the rewards when predetermined dollar levels are met.

Another plus of ownership stems from the expense-tracking reports you receive annually and through each quarter. That data allows you to see exactly where your dollars are being spent and at tax time, you can get a better feel for which purchases are deductible. If you also have partners or employees who need to manage expense accounts, additional cards are available at no cost. Also, if you take your business across international boundaries, you won’t incur foreign transaction fees by using the card abroad.

Things to Consider

If you acquire this card as a new business owner, it’s prudent to manage the use of it carefully. The high APR on purchases makes it a smart move to pay off your balance each month. This is magnified by the fact that no special introductory rate offer exists for new purchases, so carrying a balance will have you paying more for goods and services than you should. Transferring balances could also put you at a disadvantage, as those amounts start to accrue interest from the get-go at 24.49% variable.

You should know exactly where you stand credit-wise before you apply. A score of 620 or greater might get you a better deal. There are more enhanced rewards programs with other cards — especially if you or your associates travel frequently.

How to Get the Most from this Card

To maximize the use of the Capital One® Spark® Classic for Business, it’s best to view the account as a bridge to greater opportunities for financing your operations. However, as you establish or rebuild your credit, you can take advantage of the cash-back rewards program by using the card to pay recurring expenses covered by your cash flow. As long as you’re not incurring any transaction fees on the vendor side, you can use the card to pay rent, utilities, insurance and other monthly obligations that will earn you 1% cash back. If you spend $2,000 per month combined on all these expenses, you’ll receive a $240 cash-back reward for the year.

Using the card to pay for expenses already factored into your business plan will help you on two fronts: it earns you rewards and establishes solid payment habits that you’ll need to explore future borrowing opportunities. This card should be used as a piece of a larger puzzle — whether for those operational costs or small purchases that can be immediately paid off. If you follow this pattern, it will pave the way to securing a glitzier business travel rewards card like Ink Business Preferred℠ Credit Card which earns you beefier bonuses.

Other Card Options that Might Interest You

You’ll pay no annual fee and you’ll need better credit, but once you’re ready, the Ink Business Cash℠ Credit Card by Chase provides some impressive cash-back incentives. You could earn 5% cash back on the first $25,000 spent in combined purchases at office supply stores and on internet, cable and phone services each account anniversary year. You could also earn 2% cash back on the first $25,000 spent in combined purchases at gas stations and restaurants each account anniversary year. If you’re a start-up business looking to finance a moderate purchase when you receive approval, the card offers a 0% introductory rate for12 months. If you do need to carry a balance as time passes, you’ll be better off with the 14.74% – 20.74% variable APR that the Ink Business Cash℠ Credit Card offers.

If travel becomes relevant and you’re okay with a $95 annual fee, the Ink Business Preferred℠ Credit Card — also issued by Chase — offers some great rewards in that department. After you spend $5,000 in the first three months of account opening, you’ll receive 80,000 bonus points, which are worth approximately $1,000 in travel rewards. For certain business categories like shipping or Internet and phone services, for each dollar you spend you’ll get three points in return. You can transfer those points to other travel programs, but they’re worth 25% more if you redeem them through the Chase Ultimate Rewards® program.

The Final Word

When you’re a start-up or an owner who’s had some credit-related issues in the past, you’ll find a very limited selection of business credit cards for establishing and rebuilding your standing. With that in mind, the Capital One® Spark® Classic for Business stands out as a very good choice for people with average credit. It carries no annual fee, and its high APR shouldn’t be an issue if you carefully manage the use of the card. You’ll only get a moderate percentage of cash back, but any perk at this stage is a welcome one. Overall, the card works in your favor as an inexpensive and streamlined means to some more attractive business-financing ends.
If used wisely, the Capital One® Spark® Classic for Business is a great vehicle for business owners to earn some rewards and rebuild or establish credit.