Capital One Spark 1% Classic Card Review: An Easy Pick for Fair Credit

Capital One Spark 1% Classic Card is a credit card designed for business owners with average credit. We think it's a solid card to consider, particularly for cardholders seeking an entry-level business card to better establish their credit histories. You can even earn rewards while you do so. See our detailed Capital One Spark 1% Classic Card review to find out if this is the right card for your business.

This credit card is a good fit for: Business owners with average credit who want to earn rewards without paying an annual fee.

Top perks

The perks for this card are limited, but they're worth noting.

Accepts business owners with fair credit

Capital One offers many business credit cards, but the Capital One Spark 1% Classic Card is the only one specifically designed for business owners with fair credit histories. Keep this in mind as you read the rest of this card review -- and this section in particular. While some of these perks may not seem competitive with the industry's best business credit cards, they are strong for a card geared toward fair-credit borrowers who need to build credit.

Unlimited 1% cash back

Credit-builder cards are often stingy on the rewards, but having some rewards is definitely better than having no rewards. Capital One Spark 1% Classic Card cardholders enjoy a flat 1% cash back rewards rate on spending. Cash back is unlimited, with no monthly, quarterly, or annual caps. And employee cards earn the same 1% cash back rate on card purchases. Cash back rewards also don't expire, as long as the account remains open and in good standing.

No foreign transaction fees

Whether they're on the road or simply paying a bill from a foreign vendor, Capital One Spark 1% Classic Card cardholders don't have to pay foreign transaction fees. In contrast, some cards charge as much as 3% for payments in foreign currencies, or payments that route through foreign banks. This can tack on as much as $60 on purchases of $2,000, an extra fee that really adds up if you make frequent purchases from overseas suppliers.

Learn more: Best No Foreign Transaction Fee Credit Cards

$0 annual or employee card fees

Credit cards tend to charge annual fees -- either to make up for expensive perks, or to make up for high-risk cardholders. Many credit-building cards fall into the latter category. However, the Capital One Spark 1% Classic Card is a fair-credit card that doesn't charge an annual fee, a nice perk, especially since the card also earns cash back.

Employee cards also carry no annual fees. You can assign, track, and set spending limits for employee cards. Purchases on employee cards earn 1% cash back, too.

Learn more: Best No Annual Fee Credit Cards

What could be improved

This card has its drawbacks, though none are unusual.

No sign-up bonus

This card is geared toward business owners with lower spending needs and credit scores, which generally means fewer rewards perks. So, while the Capital One Spark 1% Classic Card does earn purchase rewards in the form of 1% cash back, it's noticeably lacking a sign-up bonus. A big part of the value in rewards credit cards is the bonus, so the lack is a big drawback. However, this seems to be par for the course with cards for average credit.

No 0% intro APR offer

The card doesn't offer an introductory rate on purchases or balance transfers. Top 0% intro APR cards offer no interest for a year or more, which can really help with large purchases paid off over time. Given the Capital One Spark 1% Classic Card's focus on business owners with average credit, we'd see a 0% intro APR promo as a big perk, even if it was just for a few months.

That said, few cards for lower credit score profiles come with intro APR deals, and many users will likely get more benefit from the Capital One Spark 1% Classic Card's 1% cash back and its lack of foreign transaction fees.

Personal guarantee required

If you're looking at the Capital One Spark 1% Classic Card, you likely have credit that needs a little work. But why does personal credit matter for a business credit card? The personal guarantee is why. That's a clause in your contract that says you, as the business owner, agree to be as liable for your card account as your business itself is. In other words, if your business can't pay its card debt, you are personally responsible for paying the balance. If you default on your business card, your personal credit could be at risk.

High interest rate

The Capital One Spark 1% Classic Card has a higher-than-average APR on purchases and balance transfers. And that APR isn't dependent on your qualifications. Like the rate on most credit cards, it varies based on the prime rate, but there's no range of potential APRs; everyone gets the same high APR. While a high APR isn't unexpected for a fair-credit card, this means carrying a balance can get expensive quickly.

For the best chance of approval, you need to have at least fair credit, which typically means a FICO® Score of 580 or higher. This card is one of few business credit cards with such lenient credit requirements. That said, your credit score isn't the only variable Capital One considers. The bank looks at your entire credit history. Your business's credit history, revenue, and how long it's existed also play roles.

The Capital One Spark 1% Classic Card doesn’t have quite as many perks and rewards as its Capital One siblings or many competing business credit cards, but it serves a valuable purpose. Not many other business credit cards welcome applicants with fair credit, and offer rewards without charging an annual fee. So if you have business income and need to work on your credit, the Capital One Spark 1% Classic Card could be worth a look. If you have good credit and want a more rewarding option, take a look at our list of credit card reviews for a better fit.

Our credit card methodology

At The Motley Fool Ascent, we rate credit cards on a five-star scale (1 = poor, 5 = best). Our rating criteria includes rewards rates, welcome bonuses, fees, and perks like travel credits and 0% intro APR offers to evaluate our ratings.

We combine these factors with an evaluation of brand reputation and customer satisfaction to ensure you're getting the best card recommendations. Learn more about how The Ascent rates credit cards.