Capital One Spark Classic for Business Review

Company Overview

Capital One is a full-service online bank, known for its extensive credit card offerings. It was founded in 1994 and offers savings accounts, checking accounts, CDs, and credit cards. While it is full-service online, there are limited branches in select U.S. states.

Full Review of Capital One Spark Classic for Business

Pros Explained

• Good credit isn't required to be considered for approval: Virtually all small business credit cards require a personal credit check when you apply, and many of the best options are aimed at business owners with a proven record of good or excellent personal credit. With the Capital One Spark Classic, however, you may be approved even if your credit history isn’t stellar or extensive. According to the bank, it’s possible to qualify if you’ve defaulted on a loan in the past five years or if you have a limited credit history—meaning you’ve only been using credit for less than three years. If you're trying to get your business off the ground but aren’t sure if your credit is in good enough shape for most business cards, this one could be a solid alternative.
• Simple, if lean, rewards: The card offers a flat 1% cash back on every purchase you make. While that's a modest rate compared to what you can get with good credit—the Capital One Spark 1.5% Cash Select offers a flat 1.5% cash back, for example—it provides at least some return on your spending as you begin to build a positive credit history.

Cons Explained

• No bonus: Many rewards credit cards offer a bonus as well as ongoing rewards on everyday purchases. With the Capital One Spark Classic, however, you get only the latter. While that’s hardly unusual for a no-fee card available to those with mediocre or even poor credit, it still pales beside the hundreds of dollars dangled by many of the best business cards. 
• Your personal credit history could be affected: Capital One, along with most major business credit card issuers, reports your account activity on its cards to the commercial credit bureaus. That flow of information can help you begin to build a business credit history. But in addition, Capital One reports that account information to the credit bureaus that determine your consumer credit scores. While that reporting could help enhance your personal history if your payments are timely and well within your credit limits, any missteps you make could also mar it. If you miss a payment or maintain a high balance on the Capital One Spark Classic—your credit utilization rate being a major factor in your FICO credit score—you could see your personal credit score decline along with your business one. If you'd rather keep your business and personal credit histories separate, then, this card may not be for you.

The Capital One Spark Classic is a solid option for small business owners with limited or fair credit, who may have difficulty getting most other cards. Its 1% cash-back rewards are nothing to crow about, but this card mainly provides the opportunity to acquire a credit line while also building a credit history that could help you to graduate to more rewarding alternatives.

The card is especially worth considering for business owners who don’t anticipate often (if at all), carrying a balance on the card, which could hurt both their personal credit score and that of their business. Having the funds available to pay off what you charge to the account every month and making timely payments will help achieve the goal of building a fine credit record.

Since it lacks an annual fee, Capital One Spark Classic is also an economical choice for those who seek credit-card travel pluses that might otherwise cost you when taking a trip. It provides secondary rental-car insurance coverage, for example, and travel assistance when you’re away from home. It’s also a decent choice for use abroad since it doesn’t charge a foreign transaction fee, which is typically 3% for many cards.

Rewards Earning Details

The Capital One Spark Classic offers a flat 1% cash back on every purchase you make. While that rate is underwhelming compared with some of the best business credit cards on the market, it’s something at least. And the rewards structure is simple, with the same flat cash-back rate for every transaction. 

In short, the card allows you to generate a modest flow of cash to put back into your business or take for personal use, while simultaneously building credit that could allow you to qualify for a better card.

Rewards Redemption Details

You can redeem your cash back earned with the card for any amount at any time. Your rewards never expire, and you’ll have a few redemption options.

You can receive straight cash back in the form of a paper check. Alternatively, you can request a general statement credit, get a statement credit for a specific purchase, purchase gift cards, and more. 

If you choose to get cash back, you can opt for automatic redemptions at a set time each year or once your balance reaches a specific threshold. If simplicity is a top priority in your search for a new card, this arrangement can make the Capital One Spark Classic even more appealing.

How to Maximize Your Rewards

Because the card offers a flat 1% back on everything, there's no trick to maximizing the value of the rewards program. You simply use the card whenever possible to ensure you're getting rewards on every purchase you make. There isn't a bonus, so you needn't pay attention to reaching a certain level of spending within the first few months in order to receive a cash incentive.    

Since the Capital One Spark Classic is so heavily aimed at helping to build credit, it’s worth noting how best to reach that goal as you use it. The first tip is to avoid using the card’s credit for longer than the month in which you make a charge. Pay off your bill on time and in full every month. By doing so, you’ll not only avoid interest charges, but add to your credit history in a way that’s likely to increase your credit score, and so give you access to further credit and credit options that have more favorable terms and benefits.

Standard Benefits

• Automatic payments
• $0 fraud liability
• Year-end summaries
• Account managers
• Purchase records in multiple formats
• Virtual card numbers
• Free employee cards and customized spending limits
• No foreign transaction fees
• Roadside assistance
• App access
• Security and fraud alerts
• Extended warranty
  

Cardholder Experience

Capital One was ranked fourth out of seven in the J.D. Power 2022 U.S. Small Business Credit Card Satisfaction Study. It received a below-average score. The bank’s customer service representatives are available 24 hours a day, seven days a week, which is standard among national issuers. 

You can manage your account online or with the Capital One mobile app, which J.D. Power ranked third in its 2022 U.S. Banking Mobile App Satisfaction Study.

Security Features

Capital One allows you to lock your card from the mobile app, which can prevent someone from using it without your permission if you misplace the card or it’s been stolen. You can also unlock it if you end up finding the card.

This feature is also available on employee cards, which gives you the control you need to thwart unauthorized card usage. Beyond the card-lock feature, Capital One's security features are standard for the industry.

Fees to Watch Out For

For the most part, the card’s fees are on par with industry standards. However, it's worth noting that the Capital One Spark Classic not only charges a penalty APR, which isn’t common but sets the rate at 33.65%, which is a little higher than many cards. This rate—which can kick in for some time if you miss making a payment—further underlines the value of making special efforts with this card to ensure you pay its bills in a timely manner. 

Final Verdict

The Capital One Spark Classic offers the opportunity for businesses with limited or fair credit to acquire a revolving credit line for their enterprise with some cash-back rewards on every purchase and no annual fee. However, the card's potential to affect personal credit should be considered, since Capital One will share your history with the card with the credit reporting agencies that determine your individual credit scores. 

If you plan to use the card responsibly—paying your bill on time and in full every month and keeping your balance relatively low—consider this card to help improve both your business and personal credit histories.

Frequently Asked Questions

What credit score is needed for Spark classic?

The credit score requirement for Spark Classic is fair, generally meaning a score of 580 or higher. 

Does Capital One Spark business do a hard pull?

Yes. When your application is reviewed, Capital One Spark Classic will do a hard pull on your credit report. It is designed for applicants with limited credit, meaning less than three years of credit history, but other application factors will be taken into consideration as well.

Does Capital One Spark Classic report to business credit?

Yes. Capital One may report your card activity to the personal and business credit bureaus. Your business credit card activity will appear as a small business credit card and any negative events, such as a missed payment or high credit utilization ratio, can reduce your personal credit score in the near future.

What is the limit on a Capital One business card?

The limit on a Capital One Spark Classic business card is $500, but you may receive a higher limit depending on how high your credit score and income level are.