Capital One Spark Classic for Business Review: Is It a Good Option for Business Owners with Average Credit?
Capital One’s Spark Classic is a business rewards credit card whose main features are designed for business owners with average credit.
Among Capital One’s five business cards, the Classic is the one card that Capital One designated for “average” credit, which makes it a unique option for certain cardholders.
Exactly how this card could be a good fit for you is something we’re going to explore in this review by doing an in-depth analysis of the Spark Classic. We’ll analyze its rewards, benefits, rates and fees and then do a comparison of this card to other credit cards.
We’ll wrap up with our thoughts on how you can use this card to your advantage in a way that makes it beneficial to own.
A Quick Note About Who Can Get This Card
Capital One notes that the Spark Classic is available to those with average credit and above. According to their definition, ”average” means:
- You’ve had a default in the past five years
- You have a limited credit history (less than three years of credit)
The Spark Classic from Capital One’s Rewards
In today’s credit card world, rewards are what make owning a credit card almost a necessity for those who have the cash on hand to pay off their balance in full every month (more on that later).
Most cards will provide you with a percentage rate for rewards. The Classic gives you 1% cash back for nearly every dollar you spend. Capital One automatically calculates the rewards you earn on every purchase, then adds those rewards to your rewards balance every month.
At any time, you can log into your Capital One account and view that balance. Capital One gives you the ability to add that balance as a credit to your statement or to receive it in the form of a check.
As far as how valuable this rewards rate is, take a moment to think about how much your company spends each year. The number that you identify is at the heart of the Spark Classic and any other card that Capital One or its competitors offer.
Here’s a quick review of how much your monthly spending can earn with the Classic’s 1% rewards rate:
- $20,000: $200 in rewards
- $25,000: $250 in rewards
- $30,000: $300 in rewards
- $35,000: $350 in rewards
- $40,000: $400 in rewards
- $45,000: $450 in rewards
- $50,000: $500 in rewards
Some of the transactions that wouldn’t earn rewards would be interest payments you’d make to the card for carrying a balance or, for example, a late fee for making a payment after the due date.
Other cards provide more rewards than the Spark Classic, which is something we’ll cover in the comparison section.
The Spark Classic from Capital One’s Benefits
Owning a business credit card is as much about the benefits you get as it is about the rewards you get, especially for cards like the Spark Classic that have a low rewards rate.
Your benefits are what are going to make day-to-day usage simpler for you and create fewer headaches.
The Spark’s benefits are something that you get with all Capital One business cards. Here is a quick list that we’ll explain in a few seconds:
- Purchase protection
- Extended warranties
- Visa SavingsEdge
Capital One’s purchase protections covers nearly every item you buy that are damaged or stolen within 90 days of purchase.
Each claim’s cap is $10,000 and you get a lifetime claim maximum of $50,000. This type of benefit is helpful if you say, buy phones for your team and someone breaks theirs or their phone is stolen.
Some of the things that aren’t covered by purchaser protection or the extended warranty we’ll talk about in a few seconds are:
- Computer software
- Anything that disappears without evidence of theft
- Items damaged during delivery
- Used items
The card’s extended warranty benefit will give you an additional year of warranty coverage for items you buy that have a manufacturer’s warranty of three years or less. Some items that would be included in this category would be laptops and phones.
The coverage limit on replacement or repair of an item is $10,000.
The reason we pointed out these two coverages is that many cardholders aren’t aware they exist and, if they are, they don’t take advantage of them.
The third benefit we want to mention is that fact that, as a Capital One business card customer, you get access to the SavingsEdge shopping portal.
In order to use the SavingsEdge program, you’ll have to register your Spark Classic card on the Visa SavingsEdge website.
At the time of publishing, you could get the following rewards rates via SavingsEdge:
- 4% at Yext
- 3% at Stamps.com
- 5% at LaQuinta Inns & Suites
- 5% at Bing Ads
- 2% at Panera
What we like about this opportunity to earn rewards is that these business function well for B2B commerce. For example, you may choose to use Yext to manage your online social media and review platforms, Panera for team lunches and Stamps.com for shipping.
Another thing we like about this portal is that you can get elevated bonuses in shipping, ads and gas, which Capital One doesn’t really advertise but is a crucial aspect of the card. This is important because there are other business cards from American Express and Chase that advertise their elevated bonuses in areas like shipping, ads and gas.
In addition to all these benefits, you’ll also get free employee cards as well as expense tracking tools that allow you to see how you’re spending money with your Spark Classic and then download your transaction record.
The Spark Classic from Capital One’s Rates and Fees
Rewards tend to catch the attention of most business owners. However, if you find yourself in a position where you know you’re going to have to carry a balance from month to month or you’ll pay late on a regular basis, rates and fees are a crucial part of your decision:
- Purchase and cash advance APR: 24.74%
- Penalty APR: 31.15%
- Annual fee: None
- Late payment fee: Up to $39
- Cash advance fee: 3%
One of the hallmarks of this card is its simplicity of rewards and fees.
The Spark Classic has no annual fee, nor does it allow balance transfers. It has a single APR of 24.74% that you’ll get when you’re approved, regardless of high or middle-of-the-road the card is.
Based on our research, we believe the one takeaway from the card’s interest rates is that they’re high, which is something you can expect with a card designed for users who have average credit scores.
However, the concern here is the penalty APR. This is a special APR that Capital one applies to your account if you make a single late payment. According to the fine print, there’s a possibility that the 31.15% APR could apply to your account forever.
The simplest way to avoid the penalty APR is to set your card onto AutoPay and designate it to pay at least the minimum payment. As long as you have enough money in your funding account to make a payment, you won’t be late and you can avoid the penalty APR.
How the Spark Classic from Capital One Compares to Other Business Cards
We believe it’s important to understand what other business cards offer so that you can make a smart, contextual decision about the Spark Classic.
For this reason, we’ve created the following table that shows you the yearly rewards each card offers based on $30,000 yearly spending, sign-up bonuses, introductory APR offers and APR:
|Spark Classic||Spark Cash Select||Discover it Business||Chase Ink Business Unlimited||Wells Fargo Business Platinum|
|0% intro APR||None||9 months||12 months||12 months||9 months|
|APR||24.74%||14.74%-22.74%||14.99% - 22.99%||15.24% - 21.24%||13.24% - 23.24%|
The Spark Classic does not measure up to competing credit cards from Capital One, Discover, Chase and Wells Fargo.
The card’s rewards rate of 1% lags behind the 1.5% rate the Spark Classic, Discover it Business, Chase Freedom Unlimited, and Wells Fargo Business Platinum offer.
Also, those four cards provide a sign-up bonus if you can spend a certain amount of money in the first three months of owning the card.
You’ll notice, too, that the other four cards have intro APR offers in which they give you 0% on purchases for a certain amount of time. These offers can be useful if you have to make a big purchase – holiday inventory, for example – and you need to spread the payments out over time.
Finally, the APR on the Spark Classic is higher than the APR’s from the other cards.
The key here, though is that the Classic is specifically designed for business owners with average credit, whereas the other cards have rewards, rates, and fees tailored for cardholders with good to excellent credit (700 and above). As such, Capital One sees you as more of a risk and, therefore, limits the rewards you can earn to 1% and provides a single APR that is, by comparison, high.
How to Use the Capital One Spark Classic for Business to Your Advantage
As we’ve pointed out several times, this card is meant for business owners who have some blemishes on their credit report and who are looking for a rewards card that can earn them money from everyday spending.
As such, we believe this card is the perfect fit for you because it allows you to earn 1% cash back on your purchases and provides you with purchase protection, extended warranties and business accounting tools you can use to track your Spark Classic spending.
Make sure you set your card up for automatic payments so that you never pay late. Also, try and keep your balance at 30% of your credit limit or less.
Doing so will boost your credit score and build it up to the point where you can be eligible for more lucrative business rewards cards like the Spark Miles and the Spark Cash. Both of these cards have 2% rewards rates and sign-up bonuses equal to $500, making them superior to the Spark Classic.
Another benefit to raising your credit scores – the goal is 700 or above – is that the Spark Miles and Spark Cash both have APR’s that go as low as 18.74%.