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Capital One Business Credit Card Review


CapitalOne-Business-Credit-Card-Review

Finding the right business credit card can be difficult  because there are so many choices. For Capital One business credit cards there are 6 different cards: 3 cash back earning cards and 3 miles earning cards. Although it might seem overwhelming at first to decide among 6 cards, there actually isn’t too much difference between the miles and cash back cards. Instead of focusing on this distinction, you can choose the best Capital One card by looking at your spending habits and credit score.

In this guide, we summarize the three cash back cards in the first table and the miles earning cards in the second table. After that, we provide recommendations on when to use specific Capital One cards and explain the various features of Capital One cards.

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Capital One Spark Cash Back Business Credit Cards

Rewards points for these cards can be redeemed as a statement credit, check, or gift card.

  Capital One Spark Cash Select Capital One Spark Classic
Business owners with high spending levels who want to maximize the number of points

they can earn.

Business owners seeking to do

a balance transfer.

Business owners with average credit who’ve been rejected for other

business cards.

Introductory Rewards Points/Cash

Back Bonus

$250 cash back if you spend $5,000 in first 3 months plus $50 for getting employee

card in 60 days.

$100 cash back if you spend $3,000

in first 3 months.

Ongoing Rewards
Points/Cash Back
2 % back on all eligible

purchases.

1.5 % cash back on all eligible

purchases.

1% cash back on all eligible

purchases.

13.9 % to 20.9 % variable APR;

no transfer fees

12.9 % to 20.9 % variable APR;

no transfer fees

22.9 % variable APR;
no transfer fees
$59, waived
for first year
Can points be
redeemed for travel?
Yes (but retroactively reimbursed as a statement credit

or check).

Yes (but retroactively reimbursed as a statement credit

or check).

Yes (but retroactively reimbursed as a statement credit

or check).

Expense management tools?
Credit score required to

qualify

Capital One Spark Miles Business Credit Cards

These cards offer miles that can be redeemed for travel as well as cash, gift cards, etc.

  Capital One
Spark Miles Select
Business owners with high spending levels who want to maximize the number of miles

they can earn.

Business owners who want to earn miles and are planning to

do a balance transfer.

Business owners who are willing to earn fewer miles in exchange for 0 % APR for

a longer time.

Introductory
Points Bonus
25,000 bonus miles if you spend $5000 in first 3 months plus 5,000 miles for getting employee card

in 60 days.

10,000 bonus miles if you spend $3,000 in first

3 months.

2 miles per dollar on all

eligible purchases.

1.5 miles per dollar on all

eligible purchases.

1 mile per dollar on all

eligible purchases.

Regular APR on purchases and

balance transfers

13.9 % to 20.9 % variable APR;

no transfer fees

12.9 % to 20.9 % variable APR;

no transfer fees

10.9 % to 18.9 % variable APR;

no transfer fees

$59, waived for
first year
Can points be
redeemed for travel?
Expense management

tools?

Credit score
required to qualify

Overview

Capital One offers 3 cash back cards and 3 miles earning cards. The miles cards are a good choice if you travel frequently, but there actually isn’t a whole lot of difference between the miles and cash back cards.

The right Capital One card for you will depend on your business’ specific spending habits and financial needs.  There are three situations in which we recommend Capital One above all other business credit cards. These situations are detailed below.

Lower Credit Score: Try Spark Classic

Capital One Spark Classic is a good option for business owners with lower credit scores. When you apply for a business credit card, the issuer will assess your personal credit score in deciding whether you qualify for the card. Almost all business cards require excellent credit. For example, one website found that people who qualified for Chase Ink Plus or Chase Ink Cash had an average personal credit score in the 720s. In contrast, reviewers on Credit Karma say they were approved for the Spark Classic with scores in the low 600s and some with even less. So give this card a try if you’ve been rejected for other business cards.

Of course, be prepared for the fact that your credit limit may not be too high if you don’t have a great credit history. Credit Karma users reported starting out with a $1000 – $2000 monthly credit limit on this card.

Balance Transfers: Try Cash Select, Spark Select, or Miles Select

The Capital One Spark Cash Select, Spark Select, and Miles Select card are great business cards if you need to do a balance transfer. A balance transfer (described in more detail below) is when you transfer outstanding balances from one or more credit cards onto a card with a low or 0 % APR. This can make your monthly payments more affordable and help you save more money on interest.

One of the downsides to a balance transfer is that you are usually charged a balance transfer fee that could outweigh any gains you make in saving on interest. Fortunately, Capital One Spark Cash Select, Spark Select, and Miles Select cards do not charge balance transfer fees, and they feature 0 % APR for until October 2015 or January 2016, depending on which card you select. You can transfer your balances and fee pay no fees and no interest for several months.

High Spending Levels: Try Spark Miles or Spark Cash

Spark Miles and Spark Cash give you 2x rewards points with no cap on the number of points you can earn. This is one area where Capital One trumps Chase Ink. Chase Ink limits the number of 2x and 5x points you can earn to the first $50,000 you put on the card each year. Capital One has no limit, so if you spent $100,000 on your Spark Miles or Spark Cash card in one year, you would earn 2000 points. If you plan to charge a lot of business expenses to your card, you can rack up a lot of rewards points with a Capital One card.

Card Features

Introductory Points Bonus

4 out of 6 of Capital One’s business cards offer sign-on points bonuses to business owners for opening an account. Taking full advantage of these bonuses can give you some extra dollars to spend on travel or other business expenses.

The Spark Cash and Spark Miles cards offer the biggest point bonuses. There are two different bonuses. First, you can earn $250 or 25,000 miles (equal to $250 but can be more easily redeemed for travel) by spending at least $5,000 on your card within the first 3 months of opening your account and then an additional $50 or 5,000 miles by signing up for one or more employee cards within the first 60 days of opening your account.

The Spark Cash Select and Miles Select cards offer smaller introductory bonuses. You can earn $100 or 10,000 bonus miles when you spend at least $3,000 on your card in the first 3 months. There’s no additional bonus in this case for getting an employee card.

Of all the cards we reviewed, Chase Ink Plus offers the most generous sign-on bonus, twice as big as Capital One’s. They will grant you 50,000 rewards points when you spend $5000 in the first 3 months. Even better, these points are worth $625 instead of the typical $500 when redeemed for travel through Chase’s travel portal.

Ongoing Rewards Points/Cash Back

In addition to an introductory bonus, most business credit cards give you the opportunity to earn rewards points on a continuing basis. All of the Capital One business credit cards offer some type of rewards points.

Points are structured as cash back or as miles depending on which card you get, but they have the same value (1 point = 1 cent) and basically work the same way. The “miles” label seems to be primarily for branding purposes. Miles can be redeemed for travel but can also be redeemed for cash, gift cards, and more. Cash back can be redeemed as a statement credit, check, or gift card. The only difference with miles is that you can book travel directly using your miles instead of paying with your card and getting reimbursed later. For example, if I book a $500 flight, I can ‘pay’ with 50,000 points. If I had $500 in cash back, I would first have to purchase the flight with my card and await

reimbursement on my next statement or via check.

Spark Miles and Spark Cash offer the highest cash back, 2x miles and 2 % cash back, respectively, on all purchases. Spark Miles Select and Spark Cash Select give you 1.5x miles or 1.5% cash back, respectively, on all purchases. Finally, Spark Select and Spark Classic grant 1x miles or 1 % cash back, respectively, on all purchases.

In our opinion, there is one big advantage and one big disadvantage to Capital One’s points structure. On the one hand, you can earn an unlimited number of points with the Capital One cards (as much as your credit limit will allow). Chase Ink limits you to earning 2x and 5x points on the first $50,000 spent on the card in one year. However, 36 % of business owners carry a monthly balance of more than $10,000. If you’re likely to carry big balances, having no limit on points can really boost your points balance by the end of the year.

A big disadvantage to Capital One’s points program is that there are no category-specific points bonuses. Some cards, such as Amex Business Gold and Chase Ink, will let you earn 3x or 5x points in certain categories, like purchases of airfare or shipping supplies. Amex Business Gold even lets you choose a category in which to earn extra points. Unfortunately, Capital One doesn’t let you maximize points in business-specific areas.

Travel Benefits

Since many small business owners or employees travel for business purposes, we’ve dedicated one section to explaining Capital One’s travel benefits of the Chase Ink credit cards. Compared to Amex and Chase Ink, Capital One doesn’t have a great travel rewards program for business cardholders.

Most business owners who travel frequently prefer a Capital One miles card because you can pay for travel directly with your miles instead of getting reimbursed later. In other words, you can use 50,000 miles to ‘pay’ for a $500 flight on Capital One’s rewards center. Alternatively, you can book travel on a website like Expedia or Priceline or through your travel agent and then request reimbursement to your account.

Chase Ink Plus and Amex have much better travel perks than Capital One. On the Ink Plus card, your points value increases by 25 % when you book travel on Chase’s travel portal. Amex lets you transfer your points to leading frequent flyer and loyalty programs, sometimes on a greater than 1:1 basis (i.e. for example, earn 40,000 frequent flier miles for just 20,000 Amex rewards points). If travel is central to your business, we recommend Chase Ink or Amex over Capital One.

As a Capital One Visa Business cardholder, you will enjoy protections such as lost luggage insurance and travel accident insurance. See here for more details on these benefits.

APR

Annual Percentage Rate (APR) is the cost of borrowing money on your credit card. We recommend paying off the balance on your card in full each month, so you’re not wasting precious business funds on interest. If you won’t be able to pay off the balance in full, then APR is an important consideration.

Three of Capital One’s Business cards offer 0 % APR for a brief introductory period. Spark Cash Select and Miles Select offer 0 % APR until October 2015, and Spark Select offers 0 % APR until January 2016. To compare, Chase Ink Cash offers 0 % APR for a full year.

After any applicable intro periods. the APR for Capital One cards hovers between 10.9 % to 22.9 % variable, depending on which card you choose. Your exact APR will be determined by a number of factors, such as your creditworthiness and credit limit.

As is typical with credit cards, Capital One APRs are variable, meaning that they can change based on market conditions. Credit card interest rates have fallen over the last few decades, but there’s usually not too much variation from year to year.

Remember that your regular APR can change under other circumstances too. For example, if you’re late with a payment, you are subject to a higher penalty APR. In addition, if you withdraw cash using your credit card (cash advance) or withdraw more than your credit limit allows (overdraft), you are subject to a higher APR and possible to other fees. Always review your cardholder agreement carefully, so you understand your APR.

Annual Fees and Foreign Transaction Fees

While APR is relevant only for those who keep a balance on their credit card, annual fees and foreign transaction fees affect all cardholders. Capital One is very competitive when it comes to annual fees and foreign transaction fees.

Capital One charges an annual fee for only two of its cards–the Spark Cash and Spark Miles. However, the fee is only $59 and waived for the first year. This is low compared to annual fees for other cards. For example, Chase Ink Plus charges $95 annually after the first year, and Amex Business Gold charges $175 annually after the first year. Remember, however, that you’re also earning more points with those cards, which helps to offset the larger fee.

A nice thing with Capital One is that there are no foreign transaction fees for any of its business cards. This is good news for small business owners or employees who frequently travel abroad.

Capital One business cards will be chip-enabled by the end of 2015. Chip technology makes international purchases more secure.

Balance Transfers

A balance transfer is when you consolidate the outstanding balances on your credit cards and transfer them to a low or no interest credit card to lower your monthly payments. As noted above, we suggest always paying off your balance in full, but a balance transfer can provide some welcome relief if you’re struggling from credit card debt.

Capital One Spark Cash Select, Spark Miles Select, and Spark Select are excellent choices for balance transfers. All three offer 0 % APR for several months (Spark Select until Jan. 2016) and no balance transfer fees. As a result, you can truly save on interest if you transfer your balances and pay them off during the intro period. Most other cards charge a balance transfer fee of $5-10 or 3-5% of the transfer amount.

Here’s an example to show you how you can save money with a balance transfer. For example, let’s say you owe $2,000 on a credit card that charges 12 % APR. You would have to pay $249 per month to pay off the balance over 9 months. If you transfer your balance over to your Spark Select card during the 0 % APR intro period, you could pay off the balance in 9 months by paying $222 per month. That saves you $243 in interest over the course of 9 months.

Employee Cards and Expense Tracking

If you have employees, you may want to issue a credit card to them to use for business purposes. All of the Capital One business cards offer free employee cards and limited expense management tools to keep track of charges that are made on the card.

Unfortunately, Capital One does not have a business-specific app for managing employee use of your card. You can use Capital One Wallet, an app designed to help you track spending, but this app doesn’t allow you monitor employee usage. In order to set employee spending limits, you must call Capital One’s customer service line. Also, Capital One is not set up to send you instant alerts when your employees use the card. You will, however, have online access to your employees’ monthly statements where you can see their spending activity. Chase Ink and Amex have a business mobile app for tracking employee purchases, uploading receipts, and importing expenses into bookkeeping software.

Credit Score

An excellent personal credit score is needed to qualify for all Capital One business cards, except the Spark Classic. If you have only average personal credit (high 500s to low 600s), we suggest applying for the Spark Classic card. This is one of the very few business credit cards that’s available for those with average credit.

Once you have a Capital One Business Card, it will appear on your business credit report as a business credit card. It sits separately from your personal financial accounts and normally shouldn’t affect your personal credit score. However, in the cardholder agreement, you have to personally guarantee (scroll down to and click “Rate and fee information”) that you will pay outstanding balances on the card. So, if you regularly miss payments, your personal credit score could take a hit. Remember that this is a business card, and your cardholder agreement limits its use to business purposes.

If you have very poor credit (under 550), your best option is a secured business credit card, such as the Wells Fargo secured business credit card. You must provide a security deposit, and this card is designed to help you repair your credit.

Need some money for your business?Click hereto get our FREE Guide:
How to Get a Small Business Loan.

Bottom Line

Capital One’s line of business credit cards doesn’t offer too many rewards points compared to Chase Ink or Amex, but it does have some stand out features. It’s good for businesses that spend a lot and want a card with no cap on the number of points that can be earned. It’s also good for businesses that are planning to do a balance transfer because several of Capital One’s cards offer 0 % intro APR and no balance transfer fees. Finally, Capital One Spark Classic is unique in offering a cash back credit card for business owners with average credit scores.

Try Capital One Spark Classic


Category: Business card

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