Capital One Spark Classic Review: Build Your Business and Your Credit

Your idea for a small business is a slam dunk, but your credit score is less than inspired. What options do you have when seeking a business credit card? Unfortunately, there aren't many — most business cards cater to those with good-to-excellent credit.

Enter the Capital One® Spark® Classic for Business. Like many fair-credit cards, it's not big on rewards and has a high APR. But you can still earn cash back and enjoy entrepreneur-friendly features while you work your way toward a higher credit score.

Capital One® Spark® Classic for Business: Key features

• Card type: Small business.

• Annual fee: $0.

• Sign-up bonus: None.

• Rewards: Earn 1% cash back on all purchases.

• APR: 25.24% Variable APR.

• Balance transfer fee: None.

• Foreign transaction fees: 0%.

• Other benefits:

  • Employee cards come at no extra cost.

  • Receive itemized spending reports, with the ability to download your purchase history to a spreadsheet or to accounting software.

» MORE: Capital One credit cards mobile app review

Benefits of the Capital One® Spark® Classic for Business

The cash-back rewards are foolproof. You can earn unlimited 1% cash back on all purchases, every day. There's no minimum to redeem, and you can elect to redeem for things like a statement credit, check, credit toward a previous purchase or gift cards. Inclined to forget to do this? You can set up automatic redemptions at predetermined times, or when your cash-back balance reaches certain dollar thresholds.

This card travels well. If your business takes you overseas, you won't pay a foreign transaction fee when using this card. And because it's a Visa card, it's widely accepted around the world.

It helps you track your spending. A helpful feature of many business cards, the itemized spending reports and downloadable purchase history make it easier to see where your money is going, so you can adjust your business budget and easily identify tax-deductible expenses.

Drawbacks to consider

Other business cards offer higher rewards. The Capital One® Spark® Classic for Business has no juicy sign-up bonus, and its rewards-earning rate is pedestrian when compared with many other business credit cards. That's because this card is a steppingstone to a good credit score and the more rewarding business credit cards that come with it.

There's no introductory APR period. If you're fronting the cost for expensive equipment and supplies, the Capital One® Spark® Classic for Business won't give you much of a cushion. That 25.24% Variable APR kicks in the minute you start to carry a balance or transfer a balance from another card.

Possible alternatives

BBVA Compass Visa® Business Rewards Credit Card

The BBVA Compass Visa® Business Rewards Credit Card is also an option if you have fair credit and plan to carry a balance for a time. However, there's one major downside: It's available in only seven states. It offers 0% or 3.99% introductory APR on balance transfers requested within 90 days of account open date for one year, based on your creditworthiness., and then the ongoing APR of 11.24% - 25.24% Variable APR. You'll earn 3 points per dollar spent at office supply stores, 2 points per dollar at gas stations and restaurants, and 1 point per dollar on all other purchases. Points can be redeemed for account credits or gift cards. Through Dec. 31, 2019, you can earn 20,000 points when you spend $3,000 in the first 90 days. With an annual fee of $0, this card can trump the Capital One® Spark® Classic for Business — but only if you're geographically eligible to apply for it.

Capital One® Spark® Cash Select for Business

As the middle sibling of the Spark® Cash family, the Capital One® Spark® Cash Select for Business has more to offer once your credit score increases while keeping the $0 annual fee. You'll earn unlimited 1.5% cash back on all purchases. Plus, a one-time $200 cash bonus once you spend $3,000 on purchases within 3 months from account opening. If you plan to carry a balance, you'll get 0% on Purchases for 9 months, and then the ongoing APR of 15.24% - 23.24% Variable APR. Willing to pay an annual fee? Consider the Capital One® Spark® Cash for Business to earn 2% cash back and an even bigger sign-up bonus. The annual fee is $0 for the first year, then $95.

Ink Business Preferred℠ Credit Card

In business, you gotta dream big. Sometimes, the same goes for credit cards. The Ink Business Preferred℠ Credit Card is a card to work your way toward once you have good to excellent credit, especially if you'd like to redeem points for travel. Earn 3 points per dollar on the first $150,000 spent each year in combined purchases on travel, shipping purchases, internet, cable and phone services, as well as on advertising purchases made with social media sites and search engines. All other purchases will earn you 1 point per dollar. The card comes with one of the most generous sign-up bonuses around: Earn 80,000 bonus points after you spend $5,000 on purchases in the first 3 months from account opening. That's $1,000 toward travel when you redeem through Chase Ultimate Rewards®. You can still redeem points for cash at a value of 1 cent per point, but redeeming for travel makes points worth 1.25 cents apiece. The card's annual fee is $95.

Should you get the Capital One® Spark® Classic for Business?

If you have fair credit and are seeking a business credit card, the Capital One® Spark® Classic for Business is a solid option to get you on the path of building a better credit history. Beware if you tend to carry a balance, however. The high APR will make carrying a balance expensive. But if you use the card responsibly and increase your credit score over time, that will open up the possibility of qualifying for other business credit cards with more robust rewards programs.