Capital One Business Credit Card Review & Alternatives

Capital One Business Credit Card Review & Alternatives
Contents

Corporate cards empower business owners and employees to make purchases conveniently with a digital trail. The most effective cards make payment easy and give your company tools to manage expenses and control budgets. 

Capital One Spark business cards are a popular choice for business owners looking for cash back. Their five types of cards target business owners with fair to excellent credit and offer either 1 - 2% cashback or 1.5 - 2x miles rewards. 

If you’re focused on the credit card rewards, you might have your eye on the wrong prize. Corporate cards can offer more than a payment option or digital expense record. A tech-enabled solution reduces the cost and hassle of expense administration while empowering your team to set and follow its own budgets. 

We’ll review Capital One Spark business credit cards and alternatives to help you streamline expense management and stay on budget.

How to evaluate business credit cards

Seeing a corporate card simply as a payment solution makes choosing a card reasonably easy. Most cards offer secure payment options, electronic data downloads, and rewards that seem more exciting than they are necessary. 

However, if you’d like to help your finance team save time (which is money!), you’ll focus on the technologies that can get you there, even with corporate cards. Instead of adding credit card tracking to the administrative workload, you can free your accounting team from tedious and repetitive administration by asking the right questions.  

Does the Capital One Spark card simplify the payment process?

Capital One Spark cards are traditional physical credit cards. The embedded EMV chip keeps transactions secure, and you’ll be able to download electronic records of transactions at any time for budget or tax purposes. Swiping with the card is easy, but Capital One business credit cards don’t have a contactless option yet.

Capital One offers virtual card numbers through a browser extension called Eno. Instead of having one virtual card, you download Eno to mask your card number whenever you shop online. However, this doesn’t enable virtual cards to be issued to your employees. 

Bill Pay

In early 2020, Capital One Spark discontinued its business bill pay service. Bill pay is still available through the Capital One business checking account, but business banking no longer accepts new customers from every US location. If you wanted to keep your banking and credit card relationship with the same institution, you might not be able to unless you’re already a banking customer.

Does the Capital One Spark card reduce admin?

Beyond serving as a means of payment, the most effective business credit cards also reduce administrative tasks like expense reporting. 

Capital One Spark business credit cards offer standard statement reporting and downloadable transaction data. But if you haven’t issued one to every employee or your cardholders forget to use the corporate card, you’ll still have to deal with expense reports and reimbursement. 

Capital One discontinued their receipt capture features from their wallet app, and OCR document scanning isn’t available. When you need to attach receipts, you’ll need another solution. Support functions also won’t benefit from direct accounting software integration or travel integrations. 

The Spark online user interface is convenient and easy to use. Adding additional cards from the dashboard is quick and easy and costs nothing. You can also choose your monthly due dates and set up automatic payments. Overall the dashboard is similar to most other credit card companies, without specific spend management features. 

Does the Capital One Spark card give you real-time visibility into total spend?

The Capital One Spark cards give you access to your credit card transactions in real-time but have limited options for manipulating the data. You can download transaction records in Excel, Quicken, and QuickBooks formats and work on them outside of the system. Like many other business credit cards, the card also provides an itemized spending report for year-end taxes and budgeting.

A list of credit card transactions clearly does not give you full visibility into total spend. You also won’t get accounts payable services unless you apply for their separate banking solution, which is a different product. 

Can the Capital One Spark card prevent over-budget or out of policy spend?

Capital One Spark cards can be assigned account manager or authorized user status. You can set individual spending and cash withdrawal limits per user, but that’s where your level of control ends.

The expense management tools are relatively blunt and basic. It isn’t possible to enforce a corporate spending policy when you set the spending limit. You also can’t approve or reject transactions, unless the user breaches the total individual credit limit. 

Without granular control of transactions before they happen, you can’t prevent any over-budget or out-of-policy spending. The card also doesn’t offer bill payment approvals or pre-transaction approvals. 

Does the Capital One Spark card empower your team to manage their budgets?

With the Capital One Spark card, you can authorize account managers to make payments, resolve problems, and review transactions. The card platform will not, however, let you allocate budgets. Without the ability to enforce corporate policies in real-time, your finance teams still have to reconcile actual spending to budgets later. 

If your team has to wait for finance to complete the month-end accounts before they know whether they’re on track or overspent, you’re bound to miss your budget goals. Tech-enabled card corporate cards ensure that expenses are visible and tracked in real-time, making it easier to keep costs in check.

What are the Capital One Spark card fees?

Capital One Spark cards do not charge an annual fee during the first year of use for new cardmembers. Starting the second year, the annual fee is $95 for the Spark Cash card and 2x Miles Card.

Depending on the card you choose, the Annual Percentage Rate (APR) ranges from 13.99% to 26.99%. Some cards offer an introductory APR of 0%.

The APR for cash advances is 26.99%, and the penalty APR is 29.4%. You’ll pay no foreign transaction fees, but cash advances will cost you the greater of 3% or $10. Penalty fees of up to $39 apply for late payments.

How do I qualify for the Capital One Spark card?

Qualifying for the Capital One Spark cards may be easier than qualifying for other business credit cards. The Capital One Spark Classic card can approve applicants with fair credit scores of 580 or higher. If you’re looking for one of the other cards with better perks, you’ll need an excellent credit rating.  

An excellent credit rating typically means a credit score of at least 680 with a three-year plus credit history. If you have a limited credit history or defaulted on a loan in the past five years, you may have to settle for the Classic card. 

Capital One Business Credit Cards Perks That Don’t Matter

Many of the perks that come with a corporate credit card aren’t that useful when your priorities include cash flow management, simplified expense management and payments, better visibility, and spend control.

Credit

While Capital One Spark cards offer a 30 day payment period, having those 30 days of “float” isn’t necessary for a funded business. If you end up carrying a balance, which you may even do unintentionally, the high interest rates can pile up. 

Users report receiving low credit lines and having difficulty applying for an increase in credit limits. 

Rewards

Three of the Spark Capital One business credit cards offer cashback rewards. Depending on the card you qualify for, you can earn a 1-2% reward. Before you settle for the temptation of rewards, carefully weigh the benefits against potential budget overruns and the extra time and effort spent on manual reporting. 

Add up the labor costs of administering the Capital One card and reconciling expenses, and the rewards become much less attractive.   

Capital One Spark Card vs. Lola.com

If you’re looking for a company card that tracks expenditure to budget in real-time, giving you the control to manage expenses before they happen, you may prefer a card that has more than rewards.

Capital One Spark versus Lola.com checklist

 

Who is a good fit for Capital One Spark?

Businesses with excellent credit that prefer 2% cashback and don’t mind an annual fee might enjoy the Capital One Spark Cash card. Alternatively, the Capital One Spark Classic gives 1% cashback without an annual fee. You can have a fair credit score and still qualify.

The miles cards with 1.5x or 2x mileage points also may work for businesses whose employees travel extensively. 

The Spark cards work well for businesses who think that the rewards are worth the time and energy spent on additional spend management. They are probably not the best choice for those who want to control spending at the point of purchase, stay on budget, and empower teams.

Who is a good fit for Lola.com?

Lola.com offers a spend management system that helps you control expenses, enforce budgets, and free your team from unnecessary admin.  It reduces the cost and hassle of administering a typical corporate credit card, while offering you flexibility and visibility to manage spend. Lola is the logical choice for finance teams who wish to:

  • Create dynamic controls for every employee credit card
  • Empower budget owners to manage their budgets on their own
  • Easily deploy corporate cards across the company
  • Eliminate reimbursements and expense reports
  • Control expenses in real-time

FAQs

What are the Capital One Spark card fees?

There’s no annual fee on all cards except for the Capital One Spark Cash card, which has a $95 fee after the first year. No foreign transaction fees, though penalty APRs apply.

How do I qualify for the Capital One Spark card?

You’ll need a credit score of at least 580 to qualify for the Spark Classic cards. The rest of the Capital One Spark cards require a score of at least 680.

Does the Capital One Spark card simplify the payment process?

Not really. Their physical cards are not contactless-enabled, and you can only use a virtual card number if you download the Eno browser extension, purely for an additional layer of security. Bill pay is not offered.

Does the Capital One Spark card reduce admin?

Sort of. You don’t have to process reimbursements for transactions on the card, but it doesn’t eliminate expense reporting entirely. You can set up automatic payment for your balance.

Does the Capital One Spark card give you real-time visibility into total spend?

No. Spending reports and real-time transactions are available online but accounts payable and payroll expenditure are not visible.

Can the Capital One Spark card prevent over-budget or out of policy spend?

No. You can’t set limits according to company policy or budget. 

Does the Capital One Spark card empower your team to manage their budgets?

No. You cannot compare actual spend to budget until after the fact, and your team won’t have the visibility to manage their own budgets.

Lola.com is the spend management solution that keeps you on budget.


About the Author: Anna Yen
Anna Yen, CFA, has nearly 2 decades of experience spanning financial markets, cryptocurrencies, and digital marketing. Currently she manages digital assets at FamilyFI, working to empower families with financial literacy.